Jaswinder Khosa v. Pilot Insurance Company, 1996 ONICDRG 181

Ontario Insurance Commission

Neutral Citation: 1996 ONICDRG 181 OIC A95-000375

Between:

Jaswinder Khosa Applicant

and

Pilot Insurance Company Insurer

Decision

Issues:

The Applicant, Jaswinder Khosa, was injured in a motor vehicle accident on March 25, 1993. He applied for and received statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under Ontario Regulation 672.¹ Weekly income benefits were terminated by Pilot on May 15, 1993. The parties were unable to resolve their disputes through mediation and Mr. Khosa applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Mr. Khosa entitled to weekly income benefits under section 12(1) of the Schedule from May 16, 1993 until November 30, 1993?

2. Is the Applicant barred from receiving further weekly income benefits due to failure to bring the application for arbitration before the expiration of the limitation period?

3. Is Pilot entitled to a repayment of benefits paid to Mr. Khosa, pursuant to section 27(1) of the Schedule?

4. Is Mr. Khosa required to pay Pilot its assessment fee of $2,000.00, pursuant to section 282(11.2) of the Act?

Mr. Khosa also claims interest on any amounts owing, and his expenses incurred in the hearing.

Result:

1. Mr. Khosa is not entitled to further weekly income benefits.

2. Pilot cannot proceed with its claim of repayment.

3. Mr. Khosa shall pay Pilot its assessment fee of $2,000.00.

4. Mr. Khosa is not entitled to any expenses he may have incurred in this arbitration.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on July 16, 1996, at 10:00 a.m., before me, Asfaw Seife, arbitrator.

Present at the Hearing:

Neither the Applicant nor his representative appeared.

Pilot was represented by Ms. Grace Pang, barrister and solicitor.

The following exhibits were filed by Ms. Pang:

Exhibit 1 Surveillance Investigation Report dated October 29, 1993

Exhibit 2 Special Activities Report dated October 29, 1993

Exhibit 3 Surveillance Videotape

Exhibit 4 Letter dated October 29, 1993 from Pilot to the Applicant

There were no witnesses.

Documents before the arbitrator:

1. Report of Mediator dated March 17, 1994

2. Application for Arbitration dated September 12, 1995

3. Response by Insurer dated November 27, 1995

4. Letter dated December 5, 1995, from Mr. Thomas Riesz, barrister and solicitor, to the Commission advising that he was no longer acting as Mr. Khosa's representative

5. Notice of pre-hearing discussion dated January 22, 1996

6. Letter dated May 17, 1996 confirming the pre-hearing discussion that took place on May 1, 1996

7. Notice of Hearing dated May 6, 1996

Reasons for decision:

Mr. Khosa was paid weekly income benefits under section 12(1) of the Schedule at the rate of $185.60, from one week after the accident of March 25, 1993 until May 15, 1993. Pilot terminated his benefits on the basis that he no longer suffers from a substantial inability to perform the essential tasks of his employment.

Mr. Khosa applied for mediation of the dispute with Pilot. During the mediation, Mr. Khosa disputed both the termination and the amount of his weekly income benefits. Mediation having failed, the mediator issued her report on March 17, 1994. Mr. Khosa applied for arbitration on September 12, 1995.

By letter dated December 5, 1995, Mr. Thomas Riesz, barrister and solicitor, advised the Commission that he no longer represented Mr. Khosa.

A notice of pre-hearing discussion was sent to the parties on January 22, 1996, advising that the pre-hearing in this case would be held on May 1, 1996.

The pre-hearing discussion was held on May 1, 1996, as scheduled. Neither Mr. Khosa nor his representative appeared at the pre-hearing. Pilot was represented by Ms. Pang. The arbitrator who conducted the pre-hearing discussion attempted to contact Mr. Khosa; however he was unsuccessful. The pre-hearing continued without Mr. Khosa's participation. The issues in the arbitration were identified and production orders were made by the arbitrator. The hearing was set for July 16, 1996.

By letter sent to both parties on May 17, 1996, the arbitrator confirmed pre-hearing discussions, the issues in the arbitration, and the date of the hearing.

The Commission sent a formal Notice of Hearing to the parties, dated May 6, 1996. The Notice advised, among other things, that if the parties or their representatives did not attend at the hearing, the arbitrator might dispose of the case in their absence and that they would not be entitled to any further notice of the arbitration proceedings.

On July 10, 1996, the pre-hearing arbitrator received a telephone call from Ms. Pang who advised that she had served all the documents on Mr. Khosa, but that she had received no response from him.

The hearing was held on July 16, 1996, at 10:00 a.m., as scheduled. Ms. Pang attended, representing Pilot. Mr. Khosa did not attend. No one appeared at the hearing on his behalf. He had filed no medical or other documents. Before commencing the hearing, I attempted to locate Mr. Khosa by telephone, unsuccessfully.

Rule 35.2 of the Dispute Resolution Practice Code (the "Code") states that if a party does not attend an oral hearing in accordance with the notice of oral hearing, the arbitrator may proceed in the party's absence and the party will not be entitled to any further notice in the proceeding.

There was no indication that Mr. Khosa had not received the Notice of Hearing or the pre-hearing letter. After waiting for him for a reasonable length of time, I commenced the arbitration in Mr. Khosa's absence.

Ms. Pang filed four exhibits, and outlined the reasons for the termination of benefits. Ms. Pang asked me to dismiss the Applicant's claim, and to order him to repay the benefits he received. Ms. Pang also argued that the claim is frivolous, vexatious and an abuse of process. She requested an order requiring Mr. Khosa to pay Pilot its assessment fee of $2,000.00 because Mr. Khosa was given due notice of the pre-hearing and the hearing on this matter; however he failed to appear at both proceedings.

I have received no representations by Mr. Khosa himself or any other person as to why he did not attend. Mr. Khosa has presented no evidence in support of his claim. The onus is on the applicant to pursue his claim with due diligence and to present evidence supporting his claim. Mr. Khosa has done neither. On the other hand, Pilot was represented by Ms. Pang, who filed evidence and made submissions. Accordingly, I conclude that Mr. Khosa's claim must be dismissed. He is not entitled to any further weekly income benefits, nor to any expenses he may have incurred in respect of the arbitration.

Under section 282(11.2) of the Act, 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 that does not exceed the amount assessed against the insurer in respect of the arbitration. In this case, Pilot has paid a $2,000.00 assessment fee.

As indicated in numerous arbitration decisions, the dispute resolution scheme is designed to facilitate the applicant's access to relatively inexpensive, speedy and informal adjudication of disputes. Abuse of this process seriously undermines its effectiveness and must be discouraged.

In the circumstances of this case, it is clear that Mr. Khosa has attempted to advance a claim which he was not prepared to pursue. Having elected an oral hearing, he failed to attend both the pre-hearing and the hearing after receiving proper notice. He offered no explanation of his conduct. Accordingly, I have no hesitation in finding Mr. Khosa's conduct to be vexatious and an abuse of process. As a result of Mr. Khosa's actions, the Insurer has had to incur considerable expenses in order to defend the claim.

I therefore order Mr. Khosa to pay Pilot $2,000.00, pursuant to section 282(11.2) of the Act, being the amount Pilot paid in respect of the arbitration.

In her submissions, Ms. Pang urged me to order Mr. Khosa to repay Pilot $1,113.60 with interest, being the entire amount of weekly benefits paid to him. Ms. Pang submitted that while Pilot is not alleging fraud in this case, the claim for repayment was based on the fact that Mr. Khosa suffered no disabilities as a result of the accident. Ms. Pang submitted that I have jurisdiction to determine this issue, since it is properly before me, and Mr. Khosa was given due notice of the hearing and all of the issues in dispute.

In Aladejebi,² Arbitrator Janice Mackintosh stated that the Code and the governing legislation provide no equivalent to Rule 27 of the Rules of Civil Procedure for the courts, which creates a stand-alone counterclaim that survives the withdrawal of a plaintiff's statement of claim. She found that an insurer has no independent right to refer matters to arbitration or to raise matters for determination which do not "naturally or consequentially flow" from a determination of an applicant's claims. I agree.

Mr. Khosa’s claim was dismissed essentially because he abandoned his application for arbitration. Given the nature and scheme of the dispute resolution process as it currently stands, Pilot's "counter-claim" of repayment cannot stand alone and survive the dismissal of the application. Accordingly, Pilot's claim of overpayment cannot be adjudicated in this arbitration.

Order:

1. Mr. Khosa is not entitled to further weekly income benefits.

2. Pilot cannot proceed with its claim of repayment.

3. Mr. Khosa shall pay Pilot its assessment fee of $2,000.00.

4. Mr. Khosa is not entitled to any expenses he may have incurred in this arbitration.

October 23, 1996

Asfaw Seife Arbitrator

Date

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. 2Aladejebi and State Farm Mutual Automobile Insurance Company (September 27, 1994), OIC A-005933