Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1996 ONICDRG 20

Appeal P-006241

OFFICE OF THE DIRECTOR OF ARBITRATIONS

WILLIAM PETERSON

Appellant

and

ROYAL INSURANCE COMPANY OF CANADA

Respondent

Before:

Susan Naylor

Counsel:

Jeffrey Puritt (for the Appellant)

Stephen Macaulay (for the Respondent)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The arbitration order, dated September 22, 1994, is rescinded.

2. The matter is remitted for a new hearing before an arbitrator.

February 6, 1996

Susan Naylor Director’s Delegate

Date

REASONS FOR DECISION

I. INTRODUCTION

In this appeal, William Peterson seeks an order setting aside an arbitration order, dated September 22, 1994, which denied him benefits. He asks for a new hearing, or a rehearing by the Director’s delegate on appeal, of the issues before the arbitrator.

The relevant facts are drawn from the arbitration decision, dated September 22, 1994, the arbitration record, and the transcripts of the arbitration proceedings on August 23, 1994 and September 12, 1994. In addition, I have the benefit of documents from the file of Mr. Peterson’s former lawyer, Shale Wagman. This additional information was not available to the hearing arbitrator and was admitted on appeal to clarify the background to these events.

II. THE FACTS

Mr. Peterson was involved in automobile accidents on July 16, 1991 and June 11, 1992. The arbitration concerned his entitlement to weekly income benefits between May 13, 1992 to June 11, 1992 and after December 23, 1992. It also dealt with the amount of those benefits.

Mr. Peterson filed for arbitration on November 2, 1993, through his then lawyer, Mr. Wagman. A pre-hearing discussion was held on February 16, 1994. Mr. Peterson attended the pre-hearing, without his lawyer. The contents of the discussion were summarized by the pre-hearing arbitrator in a letter dated March 11, 1994, sent to both Mr. Wagman and Mr. Peterson.

The pre-hearing arbitrator ordered Mr. Peterson to produce, prior to the hearing, the following:

1. The address and telephone number of the owner of a particular taxi business;

2. Taxi runs sheets for two years before June 11, 1992;

3. An authorization for release to the insurer of clinical notes and records of several doctors from July 16, 1989;

4. Income tax returns from 1989 to the present or an authorization for the insurer to obtain the returns.

These can be characterized as fairly standard production orders.

The arbitration hearing was scheduled for August 23 and August 24, 1994. These dates were confirmed in the pre-hearing letter and in a separate Notice of Hearing. The parties were also sent a copy of the Commission’s written policy on adjournments.

The Commission’s policy on adjournments is fairly strict. Hearing dates are scheduled in consultation with the parties. Therefore, adjournments of the dates set aside are given only sparingly and for good reason.

On August 23, 1994, Kevin Bennett attended on behalf of Mr. Wagman. Mr. Bennett asked that he and Mr. Wagman be allowed to withdraw as Mr. Peterson’s representatives. He also put forward arguments on Mr. Peterson’s behalf as to why the hearing should be adjourned:

• Mr. Peterson told him that he wanted another lawyer;

• The productions had not been obtained because Mr. Peterson had misunderstood the instructions;

• Mr. Wagman’s office had difficulty communicating with Mr. Peterson because Mr. Peterson no longer had a phone.

Neither the Commission nor Royal Insurance received advance notice that Mr. Peterson’s representatives would seek to be removed from the record or that an adjournment would be requested.

Notwithstanding this, the arbitrator allowed Mr. Bennett and Mr Wagman to withdraw and agreed to adjourn the proceedings. However, he felt that only a brief adjournment was warranted, given Mr. Peterson’s lack of preparation and failure to provide notice of the adjournment request:

I’m only going to adjourn this for a week or ten days so you are going to have to act rather quickly to assemble the productions and get a lawyer and the lawyer will have to become familiar with this case, with maybe Mr. Bennett’s assistance, very quickly....

(Transcript, page 12, paragraph 21)

The hearing was rescheduled for September 12 and 13, 1994, just under three weeks later, and the arbitrator set out his expectations of Mr. Peterson:

I specifically asked Mr. Peterson, and he agreed, to immediately seek the services of a new lawyer, who would come prepared to present his case on September 12, 1994.

(Decision, page 5)

The arbitrator also dealt with the outstanding productions. Mr. Peterson signed authorizations to enable Royal Insurance to obtain the documents set out in the pre-hearing letter.

On September 7, 1994, the Commission received a facsimile letter from Justin Mariani, a law clerk at the firm of Misir, Patterson. The letter advised that Mr. Peterson had recently retained the law firm and requested an adjournment of the upcoming date. The grounds given were that the firm was unable to properly prepare the file in time and did not have counsel available. The Registrar declined the adjournment in advance of the hearing.

On September 12, 1994, Deepak Paradkar, a lawyer with the firm, attended with Mr. Peterson. Mr. Paradkar repeated the request for an adjournment. He advised the arbitrator that he had not yet received Mr. Peterson’s file from Mr. Wagman, and therefore was not in a position to prepare for the hearing. He also indicated that, due to illness and trial commitments, the firm would require at least a three month adjournment. Mr. Paradkar stated that his firm was retained solely to request the adjournment, and that if it was denied, he would withdraw from the case.

The arbitrator denied the adjournment. He was not convinced that Mr. Peterson or his new lawyers had made any attempt to obtain the file from Mr. Wagman:

Neither Mr. Paradkar or Mr. Peterson provided any evidence of efforts made to retrieve the file from Mr. Wagman. I also note that at the August 23, 1994 hearing, Mr. Bennett, on behalf of Mr. Wagman, had agreed to co-operate and immediately provide the file to Mr. Peterson’s new counsel. Thus, I am not satisfied that Misir, Patterson made any attempt to get the file from Mr. Wagman.

(Decision, page 6)

The arbitrator did not consider that Mr. Paradkar’s proposed time-frame complied with the condition that Mr. Peterson retain a lawyer who could act swiftly.

The arbitrator understood that all the production requirements had not been met and was not satisfied that Mr. Peterson or his lawyers had made sufficient efforts to move the case forward since filing for arbitration:

Mr. Peterson and his representatives have done nothing to prepare the case for hearing over the 11 months since it was filed. If I had been presented with medical reports, other expert opinions, financial documents, witness statements, or letters showing the matter was moving forward, I would have been better able to accept that this adjournment was reasonable. But faced at the hearing with what appeared to be Mr. Peterson’s and his counsels’ complete inaction since the pre-hearing, he gave me little choice, but to find that the adjournment request was not reasonable.

(Decision, page 7)

Mr. Paradkar left the hearing after the adjournment was denied. Mr. Peterson remained but did not present any evidence. Royal Insurance took the position that there was no case for it to meet, and did not present any evidence of its own. The arbitrator dismissed Mr. Peterson’s claim for benefits. In the circumstances, he declined to deal with Royal Insurance’s request for an order for repayment.

III. CONCLUSION

An adjournment is a matter of discretion, not of right. Arbitrators have the authority to control their own processes within the Commission’s rules of procedure, including the right to determine whether an adjournment should be granted. The exercise of this discretion should not be interfered with on appeal, unless there are cogent reasons for doing so. Previous cases have made it clear that it is not the function of the appeals adjudicator to second-guess the arbitrator’s judgement. However, there must be some scope for intervention where the discretion is exercised on the basis of misapprehended facts.

The arbitrator set a very short time-frame - 20 days - for the re-scheduled hearing. In so doing, he clearly wanted to ensure that Mr. Peterson would not delay in finding new counsel and that his new lawyers would proceed with the case expeditiously. The September 12 date was not made peremptory; it was meant to ensure that the proceedings moved along appropriately. In considering Mr. Peterson’s second adjournment request, the arbitrator regarded the absence of evidence of progress in the case as critical. He stated specifically that, had he received such evidence, he might have reached a different conclusion.

With the benefit of evidence not available to the arbitrator, including the contents of Mr. Wagman’s file, it is apparent that the arbitrator did not fully appreciate what efforts Mr. Peterson and his new lawyers had made.

Mr. Peterson acted quickly in trying to retain a lawyer. Both he and his new lawyers made early efforts to obtain the file but were not able to in time for the hearing. For some reason not clear to me, the August 30, 1994 letter and direction sent to Mr. Wagman requesting the file was not put before the arbitrator. In any event, Mr. Wagman only responded to this request by letter dated September 9, 1994, the last business day before the hearing. He refused to release the file without an unconditional, irrevocable, agreement that his account would be protected. This position was at variance with the arbitrator’s assumption that Mr. Peterson’s former representatives would co-operate in immediately releasing their file. In the absence of the file, Mr. Peterson’s new lawyer could not reasonably proceed on September 12, 1994, nor could he or Mr. Peterson produce the kind of evidence that the arbitrator required to show that the case was moving along.

Had the arbitrator been given all pertinent information, Mr. Peterson’s request for an adjournment would not have been refused.

This is not a case in which there is a pattern of delay, history of non-compliance, or suggestion of stalling on Mr. Peterson’s part. Documents in Mr. Wagman’s file indicate that production problems prior to the August 23, 1994 hearing date were largely attributable to a legitimate misunderstanding on Mr. Peterson’s part. The situation was corrected at the first hearing date, when Mr. Peterson signed authorizations to enable Royal Insurance to obtain the medical records and tax returns set out in the pre-hearing letter. The transcript confirms that it was only these documents that remained outstanding by the time of the September 12, 1994 hearing.

Mr. Peterson had fulfilled all the production requirements from his end and had no control over their outcome. He therefore should not be held accountable for the fact that the documents themselves were still not available by the time the hearing resumed.

In denying the adjournment, the arbitrator was influenced by the fact that Mr. Peterson’s lawyer requested a three month adjournment. However, the arbitrator was not bound to accommodate the law firm’s schedule in setting a new date for the hearing. Had the arbitrator known that the file was not available, he could have adjourned the hearing for a period, which in his opinion, was sufficient to obtain the file and prepare the case.

In the circumstances, the appeal is allowed. The arbitrator’s order is rescinded and the matter is remitted for a new hearing before an arbitrator.

There will be no order as to expenses.

February 6, 1996

Susan Naylor Director’s Delegate

Date