Ontario Insurance Commission
Neutral Citation: 1995 ONICDRG 42
File No. A-007109
BETWEEN:
GUS TALLIS Applicant
and
ROYAL INSURANCE COMPANY OF CANADA Insurer
DECISION
Issues:
The Applicant, Gus Tallis, was involved in a motor vehicle accident on February 15, 1992. He applied for weekly income benefits from Royal Insurance Company of Canada ("Royal") for the period February 15, 1992 to November 16, 1992, under Ontario Regulation 6721. Royal refused to pay any benefits.
Prior to the arbitration hearing, Mr. Tallis withdrew his claim against Royal, but seeks payment for the legal fees he incurred in respect to the arbitration proceeding.
Royal takes the position that Mr. Tallis is not entitled to any expenses. On the contrary, Royal seeks an award in the amount of $1,000.00 against Mr. Tallis, under section 282(11.2) of the Insurance Act, R.S.O. 1990, c.I.8, as amended. It also seeks an award in the amount of $1,000.00 against Mr. Tallis' representatives, under section 23 of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, as amended.
The issues in this case are:
Is Mr. Tallis entitled to his expenses related to the arbitration, under section 282(11) of the Insurance Act?
Is Royal entitled to an award in the amount of $1,000.00 against Mr. Tallis under section 282(11.2) of the Insurance Act?
Is Royal entitled to an award in the amount of $1,000.00 against Mr. Tallis' representatives under section 23 of the Statutory Powers Procedure Act?
Result:
Mr. Tallis is not entitled to his expenses.
Mr. Tallis must pay $1,000.00 to Royal, under section 282(11.2) of the Insurance Act.
I do not have authority to make a monetary award against Mr. Tallis' representatives under section 23 of the Statutory Powers Procedure Act.
Hearing:
With the consent of both parties, the issues in this case were dealt with by me by way of documentary evidence and written submissions, following a telephone conference call held on August 25, 1994. I received written submissions dated September 1, 1994, September 16, 1994 and October 20, 1994, from Mr. Shale Wagman, on behalf of Mr. Tallis. I received written submissions, dated September 8, 1994, October 7, 1994 and October 26, 1994, from Mr. John J. Aikins, on behalf of Royal. Mr. Aikins also filed a brief of documentary evidence. This brief was filed together with Mr. Aikins' written submissions of October 7, 1994.
The documents contained in Mr. Aikins' brief of documentary evidence are listed in Appendix A. Other documents before me are listed in Appendix B.
Reasons for Decision:
a) Background Facts and Issues:
Mr. Tallis was involved in a motor vehicle accident on February 15, 1992. He contends that at the time of the accident, he was a self-employed taxi driver, and was also employed as a cleaner for G.& E. Floor and Janitorial Services. Mr. Tallis initially claimed statutory accident benefits against Kingsway General Insurance Company ("Kingsway"). Mr. Tallis' claim for weekly income benefits was denied by Kingsway. Mr. Tallis applied for mediation. Mediation was unsuccessful, and Mr. Tallis then applied for arbitration. Prior to the arbitration hearing, Mr. Tallis' claim against Kingsway was settled, and a full and final release was executed by Mr. Tallis discharging Kingsway from any further claims arising from the accident of February 15, 1992.
Mr. Tallis subsequently made a claim against Royal for statutory accident benefits in respect of the same motor vehicle accident. Mr. Tallis applied for weekly income benefits, in the amount of $527.82 per week, for the period February 15, 1992 to November 16, 1992, from Royal. Royal refused to pay any benefits. Royal contends that Kingsway, and not Royal, is liable to pay statutory accident benefits to Mr. Tallis. Royal further contends that if it is determined that Royal is liable to pay statutory accident benefits, Mr. Tallis is not entitled to any weekly income benefits during the period in question because he was working. Finally, Royal states that Mr. Tallis was also in receipt of benefits from another insurer for a prior motor vehicle accident during the period for which he is claiming benefits (i.e., February 15, 1992 to November 16, 1992).
Mr. Tallis referred his dispute with Royal to mediation. Mediation was unsuccessful, and Mr. Tallis applied for arbitration. A pre-hearing discussion was held on February 16, 1994 before me. Royal was represented by Mr. Aikins. Mr. Tallis attended, represented by Mr. Kevin Bennett of Mr. Wagman's office.
At the pre-hearing on February 16, 1994, undertakings were given by Mr. Bennett and Mr. Aikins relating to the production of documents. Timeframes were agreed to for the production of certain documents. The arbitration hearing was scheduled, after consultation with the parties, for June 6, 7 and 8, 1994.
Mr. Bennett failed to fulfil the undertakings that he gave on February 16, 1994. As a result, on May 31, 1994, another pre-hearing discussion was held to deal with Mr. Aikins' request for an adjournment of the hearing scheduled for June 6, 7 and 8, 1994, and his request for orders requiring Mr. Tallis and his representatives to fulfil the undertakings.
At the pre-hearing on May 31, 1994, Mr. Bennett gave two reasons for failing to carry out the undertakings made at the earlier pre-hearing. First, there had been miscommunication between him and Mr. Wagman. Mr. Bennett was under the impression that Mr. Wagman would carry out the undertakings and Mr. Wagman was under the impression that Mr. Bennett would do so. Secondly, he was having difficulty contacting and obtaining information from Mr. Tallis.
At the pre-hearing on May 31, 1994, the hearing scheduled for June 6, 7 and 8, 1994 was adjourned and rescheduled for November 1, 2 and 3, 1994. Mr. Tallis, Mr. Wagman and Mr. Bennett were each ordered to produce certain documents in their custody or under their control. To ensure timely production of the documents, specific timeframes were established for compliance with the orders.
A few days after the deadline for compliance with the orders had passed, Mr. Wagman advised Royal and the Commission that he was unable to comply with the orders for production due to a lack of cooperation from Mr. Tallis. Mr. Wagman indicated that Mr. Tallis was withdrawing his application for arbitration, but was seeking payment for his legal fees incurred in respect of the arbitration proceeding.
While Mr. Aikins, on behalf of Royal, did not object to Mr. Tallis' withdrawal of his application for arbitration, he objected to his claim for expenses. In addition, he requested an opportunity to make submissions for costs payable to Royal. He also advised that Royal required the information that Mr. Tallis and his representatives had been ordered to produce, in order to support its position.
Another telephone conference call was held on August 25, 1994, to confirm that Mr. Tallis was withdrawing his application for arbitration, and to deal with the outstanding issues: i.e., Mr. Tallis' claim for his legal expenses in respect of the arbitration proceeding under section 282(11) of the Insurance Act, Royal's request for costs to be paid to it by Mr. Tallis, under section 282(11.2) of the Insurance Act, and Royal's request for the production of the documents by Mr. Tallis and his representatives.
The conference call on August 25, 1994 was scheduled for 10:00 a.m., however Mr. Wagman was not available until 11.00 a.m. Mr. Wagman confirmed that Mr. Tallis was withdrawing his application for arbitration but was seeking payment for legal fees in respect of the arbitration proceeding. He indicated that Mr. Tallis would not be complying with the production orders and questioned the necessity of his doing so when he was withdrawing his application for arbitration. In respect of the documents that Mr. Wagman had been ordered to produce, i.e., those relating to Mr. Tallis' claim for statutory accident benefits against Kingsway, Mr. Wagman stated that, to the best of his recollection, he had forwarded those documents to Mr. Aikins some time ago. However, Mr. Wagman undertook to deliver copies of the documents to Mr. Aikins the next day. These documents were not delivered to Mr. Aikins until September 16, 1994.
At the pre-hearing in May 1994, three days had been set aside in November (November 1, 2 and 3, 1994) for the hearing of Mr. Tallis' application for arbitration, after consultation with all parties. In view of the fact that Mr. Tallis was withdrawing his application, both Mr. Wagman and Mr. Aikins agreed, during the conference call on August 25, 1994, that the remaining issues could be heard in one day. Mr. Aikins felt that a full day would be necessary. However, Mr. Wagman advised that he was not available on November 2 and 3, 1994 and would only be able to attend in the afternoon on November 1, 1994. When I advised Mr. Wagman that the hearing would not be adjourned to accommodate his schedule, he advised that he was withdrawing as solicitor for Mr. Tallis in these circumstances. He then hung up the telephone before the call was concluded.
Subsequently, in order to save time and costs, I advised Mr. Tallis, Mr. Wagman and Mr. Aikins that, with their consent, I would dispose of the outstanding issues by way of documentary evidence and written submissions. Both parties consented to this proposal. Mr. Wagman reconsidered his decision to withdraw as solicitor for Mr. Tallis in this matter and made submissions on Mr. Tallis' behalf.
(b) Findings
1. Is Mr. Tallis entitled to his expenses related to the arbitration, under section 282(11) of the Insurance Act?
On behalf of Mr. Tallis, Mr. Wagman submits that even though Mr. Tallis is withdrawing his application for arbitration, he is entitled to be paid by Royal for his legal expenses in respect of the arbitration. Mr. Wagman submits that the legislation contemplates that an applicant is entitled to his or her expenses regardless of the outcome of the arbitration.
I disagree. An arbitrator's authority to make an award for expenses in favour of an applicant is found under section 282(11) of the Insurance Act, which provides as follows:
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)
While section 282(11) of the Insurance Act appears to allow an arbitrator to award expenses even where the arbitration is withdrawn prior to the completion of the arbitration hearing, it is not mandatory. In my view, this section does not require an arbitrator to award an applicant his or her expenses in respect of an arbitration in every case. It gives the arbitrator the discretion, i.e., the power, to make a choice between awarding or not awarding an applicant his or her expenses. Arbitrators have generally exercised their discretion to award applicants their expenses, regardless of outcome. However, expenses have been denied where it has been determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.
In this case, I decline to exercise my discretion to award expenses to Mr. Tallis because I find that the conduct of Mr. Tallis and his representatives unreasonably prolonged the arbitration proceedings. The failure of Mr. Tallis and his representatives to carry out undertakings and to comply with production orders resulted in multiple pre-hearing discussions and the adjournment and rescheduling of hearing dates. Both the Insurer and Commission staff have needlessly wasted time in dealing with Mr. Tallis' claims.
Mr. Wagman submits that if time and resources were wasted in this matter, it was because Mr. Aikins refused to divulge certain information that would have resolved this case months earlier. However, Mr. Wagman presented no evidence of a refusal by Mr. Aikins of any request, made on Mr. Tallis' behalf, for documents or information. Further, the documentary evidence filed by Royal indicates that Mr. Tallis was aware of the information that Mr. Wagman contends would have resolved this case months earlier.
2. Is Royal entitled to an award in the amount of $1,000.00 against Mr. Tallis under section 282(11.2) of the Insurance Act?
Royal seeks an award against Mr. Tallis, under section 282(11.2) of the Insurance Act. Section 282(11.2) provides as follows:
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 that was assessed against Royal in respect of this arbitration was $1,000.00, under section 14 of the Insurance Act and Ontario Regulation 220/91.
Mr. Wagman submits that Mr. Tallis' claim for weekly income benefits for the period February 15, 1992 to November 16, 1992, was neither frivolous, vexatious nor fraudulent. He submits that Mr. Tallis decided to abandon his claim out of frustration, because of the tremendous amount of time that has elapsed since the accident. However, Mr. Wagman did not present any evidence to support this submission. The evidence filed by Royal raises some serious doubts about the legitimacy of Mr. Tallis' claim for weekly income benefits for the period from February 15, 1992 to November 16, 1992. Although Mr. Tallis alleges that he suffered substantial inability to perform the essential tasks of his employment during this period, the evidence strongly suggests that Mr. Tallis was working.
Moreover, I have no hesitation in concluding that an abuse of process has occurred in this case. I saw no evidence of any effort by Mr. Tallis or his representatives to carry out the undertakings made by Mr. Bennett at the first pre-hearing. Further, neither Mr. Tallis nor his representatives made any attempt to comply with the production orders issued at the second pre-hearing. Nor did they explain their failure to comply with these orders before the deadline for compliance had passed. The failure by Mr. Tallis and his representatives to carry out the undertakings and comply with the production orders amounts, in my view, to an abuse of the arbitration process. Further, Mr. Wagman's behaviour during the conference call, on August 25, 1994, in my view, demonstrated a total lack of respect for the arbitration process.
In view of the dubious nature of Mr. Tallis' claim, the abuse of the process by Mr. Tallis and his representatives, and their disregard for the time and resources of the Insurer, as well as those of the Commission, I am satisfied that the maximum amount of $1,000.00 should be awarded against Mr. Tallis.
3. Is Royal entitled to an award in the amount of $1,000.00 against Mr. Tallis' representative under section 23 of the Statutory Powers Procedure Act?
Royal seeks an award in the amount of $1,000.00 against Mr. Tallis' representatives, under section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, as amended ("the SPPA"). Section 23(1) of the SPPA provides as follows:
(1) A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.
Royal contends that an arbitrator has the authority, pursuant to section 23(1) of the SPPA, to order Mr. Wagman and Mr. Bennett to pay costs in the sum of $1,000.00 to Royal.
I am not satisfied that section 23(1) of the SPPA gives me the authority to make a monetary award against Mr. Tallis' representatives. While the section is worded broadly, it does not specifically give a tribunal the power to require that costs be paid personally by anyone appearing as an agent on behalf of a party because of the agent's conduct in the proceedings. This is in contrast with the specific powers provided to the courts to order that costs be paid by a solicitor, under section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as amended, and Rules 15.02 and 57.07 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended.
In the absence of clear and cogent statutory language, I am not prepared to order costs against Mr. Wagman or Mr. Bennett.
Order:
Mr. Tallis is not entitled to his expenses.
Mr. Tallis must pay $1,000.00 to Royal, under section 282(11.2) of the Insurance Act.
I do not have authority to make an award in the amount of $1,000.00 against Mr. Tallis' representatives under section 23 of the Statutory Powers Procedure Act.
May 1, 1995
Shemin Manji Arbitrator
Date
SCHEDULE A
Royal's Brief of Documentary Evidence:
Tab 1 Application for Accident Benefits to Royal (1st m.v.a. May 24, 1991) dated May 28, 1991
Tab 2 Excerpts from London & Midland file
Tab 3 Application for Accident Benefits to Kingsway (m.v.a. February 15, 1992) dated May 20, 1992
Tab 4 Excerpts from documents produced by Mr. Wagman re Kingsway
Tab 5 Taxi receipts
Tab 6 Surveillance and summary
Tab 7 Application for Accident Benefits to Royal (m.v.a. February 15, 1992) dated June 2, 1993
Tab 8 Correspondence from Mr. Wagman including income tax returns
Tab 9 Statement of Allen Pancer dated April 27, 1993
Tab 10 Statement of Gus Tallis dated June 2, 1993
Tab 11 Royal Resolution Application Form dated September 8, 1993
SCHEDULE B
Other documents before the arbitrator:
Report of Mediator dated October 28, 1993
Application for Appointment of an Arbitrator dated November 2, 1993
Response by Insurer dated November 29, 1993
Notice of Pre-hearing Discussion scheduled for February 16, 1994
Pre-hearing letter dated March 8, 1994, to all parties.
Letter dated March 10, 1994 to Kingsway General Insurance Company.
Letter dated March 29, 1994, from Mr. Wagman, to the Commission.
Letter dated April 6, 1994, from solicitors for Kingsway, to the Commission.
Letter dated April 21, 1994, from Mr. Aikins, to the Commission.
Letter dated April 26, 1994, to all parties.
Notice of Resumption of Pre-Hearing Discussion scheduled for May 31, 1994.
Letter dated May 24, 1994, from Mr. Aikins, to the Commission.
Pre-hearing letter dated June 6, 1994, to all parties.
Letter dated June 6, 1994 from Mr. Aikins to Mr. Wagman.
Letter dated June 22, 1994 from Mr. Wagman to Mr. Aikins.
Letter dated June 27, 1994 from Mr. Aikins to the Commission.
Notice of Resumption of Pre-hearing Discussion scheduled for August 25, 1994.
Pre-hearing letter dated August 29, 1994, to all parties.
Letter dated August 31, 1994, from Mr. Aikins, to the Commission.
Letter dated September 12, 1994, to Mr. Wagman.
Letter dated September 21, 1994, to Mr. Aikins.
Letter dated October 21, 1994 to all parties.