James Adams v. Guardian Insurance Company of Canada, 1995 ONICDRG 184

Ontario Insurance Commission

Neutral Citation: 1995 ONICDRG 184 File No.: A-013070

Between:

James Adams, Applicant

and

Guardian Insurance Company of Canada, Insurer

Decision

Issues:

The Applicant, Mr. James Adams, was injured in a motor vehicle accident on April 29, 1993. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 672.¹ Weekly income benefits were terminated by the Insurer on January 24, 1994. The parties were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended, on April 5, 1995. The matter was scheduled for hearing commencing on November 29, 1995. Shortly before the scheduled hearing date, the Applicant advised through counsel that he wished to withdraw his application. The Insurer was not prepared to consent to the withdrawal of the application without receiving some costs.

The issue in this hearing on a preliminary issue is:

1. On what conditions is the Applicant entitled to withdraw his application?

Result:

1. The Applicant may withdraw his application for arbitration upon payment to the Insurer of the sum of $2,000.

Hearing:

The hearing was held by way of a telephone conference call on November 24, 1995, before me, M. Guy Jones, arbitrator.

Present at the Hearing:

Applicant's Representative: Stephen G. Reynolds, Barrister and Solicitor

Insurer's Representative: Catherine L. Coplea, Barrister and Solicitor

Evidence:

The Applicant, Mr. James Adams, was injured in a motor vehicle accident on April 29, 1993. Weekly income benefits were paid by the Insurer from May 6, 1993 to January 24, 1994, at which time they were terminated. The Applicant proceeded to mediation which failed. Mr. Adams then filed an Application for Arbitration on April 5, 1995. The issue put into arbitration was the entitlement to weekly income benefits after January 24, 1994. A pre-hearing of this matter was held on July 31, 1995, at which time the Applicant undertook to provide a large number of documents to the Insurer prior to the hearing. In addition, other documents were ordered to be produced by the Applicant to the Insurer prior to the hearing.

Despite numerous requests by counsel for the Insurer, the Applicant failed to provide the required documents.

On November 13, 1995, counsel for Mr. Adams advised counsel for the Insurer that the Applicant had decided that he did not wish to proceed with the arbitration, and wished to withdraw the application. Counsel for the Insurer responded by advising that they were not prepared to consent to the withdrawal without being compensated for some of their expenses.

At the preliminary hearing in this matter, counsel for the Applicant advised that his client had decided that he wished to withdraw the application in order that he might proceed with his claim through the court system. The only explanation given for this was that it was the Applicant's view that he would be able to get a lump sum settlement from the court. When asked why the decision to put the matter into the court system was made only at the eve of the arbitration hearing, counsel for the Applicant was able to advise that the medical condition of the Applicant had changed somewhat.

Counsel for the Applicant conceded that despite his best efforts, he had been unable to obtain the numerous documents that had been ordered to be produced, and that, accordingly, he was not in a position to proceed with the hearing on November 29, 1995. I should make it clear that counsel for the Applicant had made reasonable efforts to obtain the documents, but the Applicant had not provided them.

Counsel for the Insurer took the position that the Applicant had chosen to proceed by way of arbitration and the Insurer had been put to considerable expense in terms of the filing fee and lawyer's costs to prepare for the arbitration. This included the time spent attempting to obtain the various documents from the Applicant which had still not been produced.

Counsel for the Insurer also took the position that the decision to proceed in the court system was a delay tactic being used in light of the fact that the Applicant did not seem to be prepared to proceed on November 29, 1995.

Findings and Analysis:

Prior to August 1, 1995, there were no provisions in the Commission Rules of Procedure governing the withdrawal of applications. Nevertheless, arbitrators had taken the position that they had the inherent authority to control the hearing process which confers on the arbitrator the jurisdiction to determine when, and under what circumstances, an applicant can withdraw from the process. Some of the factors that had been considered in determining this question had been the stage of the process at which the applicant seeks to withdraw the application, and also whether there is any prejudice to the insurer.²

On August 1, 1995, the new Commission Rules of Procedure came into force. Rule 66.3 reads as follows:

Where a party does not agree to the withdrawal, the adjudicator may:

(a) permit the applicant to withdraw on such terms as the adjudicator considers appropriate;

(b) where the applicant is the insured person, require the applicant to pay the insurer an amount not more than the amount the insurer is required to pay the Commission to participate in the hearing, if the adjudicator decides that the withdrawal is an abuse of process.

In this particular matter, I am of the opinion that the withdrawal of the application two weeks before the scheduled hearing date amounts to an abuse of process. The Applicant chose to proceed by way of arbitration in order to attempt to obtain his weekly income benefits. He is now, as I understand it, going to attempt to proceed through the court system. While the Applicant may have tactical reasons for making this decision at this very late date, it is clear that the Insurer has been put to considerable time and expense in the arbitration process, and that this time and expense has, in large part, been wasted.

It is also clear that the Applicant has failed to provide a large number of documents that he was obligated to provide prior to the hearing. It is equally clear that without these documents, the Applicant would have had a very difficult time proving his case at the hearing scheduled for November 29, 1995. I note that in Gus Tallis and Royal Insurance Company of Canada, May 1, 1995, OIC File No. A-007109, Arbitrator Manji held that failure by the applicant to carry out the undertakings and comply with production orders amounted to an abuse of the arbitration process.

In my view, a person should not embark on an arbitration lightly. It is an expensive and time-consuming process for both sides. Accordingly, one should not be able to commence an arbitration and then at some late date when it does not suit the particular party, simply abandon it. In this particular case, the Insurer has had to pay a $2,000 filing fee in order to participate in the arbitration. In addition, as I indicated above, the Insurer was forced to expend considerable time and money attempting to respond to the Applicant's claim and to pursue the Applicant for documents which were ordered to be produced, but never were. In light of the above, I find that the Applicant must pay the Insurer the full amount that it was required to pay the Commission in order to participate in the hearing, being $2,000. I note that this is the maximum amount that I can award pursuant to Rule 66.3 of the Rules of Procedure. If I had the authority, I would have ordered a higher amount in order to reflect the fact that the Insurer was put to far greater expense than $2,000 in order to defend this application.

Order:

1. The Applicant may withdraw the application upon payment to the Insurer of the sum of $2,000.

December 13, 1995

M. Guy Jones Arbitrator

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule — Accidents Before January 1, 1994. In this decision, the term 'Schedule" will be used to refer to Regulation 672.
2. 2Blanca and Carlos Ferreyra and Royal Insurance Company of Canada, September 27, 1994, OIC File Nos. A-006328 and A-008175,