Neutral Citation: 1996 ONICDRG 23

File No. A-006369

ONTARIO INSURANCE COMMISSION

BETWEEN:

LOIS BILUSACK

Applicant

and

CO-OPERATORS GENERAL INSURANCE COMPANY

Insurer

DECISION

Introduction:

The Applicant, Lois Bilusack, was injured in a motor vehicle accident on September 25, 1992. She claimed accident benefits from The Co-Operators General Insurance Company ("Co-Operators"), payable under Ontario Regulation 672.¹

Co-Operators paid Mrs. Bilusack weekly income benefits and provided, at her request, a king size bed and various bedding items. The parties now dispute: a) the amount of weekly income benefits; b) the Insurer's claim for repayment of weekly income benefits; c) Mrs. Bilusack's entitlement to additional bedding; and d) Mrs. Bilusack's claim for extensive renovations of the master bedroom to accommodate the king size bed.

Mr. Bilusack applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended. Over the course of two pre-hearings, an arbitrator ordered the production of documents and scheduled, on consent of the parties, a hearing date of March 30, 1994. Mrs. Bilusack later requested and was denied an adjournment of the hearing. On February 28, 1994, Mrs. Bilusack withdrew from the arbitration. The Insurer objected to Mrs. Bilusack's withdrawal "on the eve of" arbitration and in the face of its claim for overpayment of weekly income benefits.

Mrs. Bilusack now wishes to refile her application for arbitration. She maintains that she was forced to withdraw because the Commission unfairly denied her request for an adjournment of the hearing date. The Insurer argues that Mrs. Bilusack should not be permitted to refile because she abused the Commission's process by withdrawing from arbitration without good reason.

Issues:

The issues in this hearing are:

1. Was Mrs. Bilusack's withdrawal an abuse of the Commission's process?

2. If so, what is the effect of such abuse on her application for refiling?

Result:

1. Mrs. Bilusack's withdrawal was an abuse of the Commission's process.

2. Mrs. Bilusack must pay the Insurer $1,000 before proceeding with arbitration, under subsection 282(11.2) of the Insurance Act.

Hearing:

The hearing was conducted by written submissions, received at the Commission on August 4, 11, and 18th, 1995, and referred to me on September 8, 1995.

Facts:

The Applicant, Lois Bilusack, is a 50-year old teacher who resides with her husband, Royce Bilusack, in North Bay, Ontario. On September 25, 1992, Mrs. Bilusack sustained various soft tissue injuries in a motor vehicle accident. She later claimed accident benefits from Co-Operators, with Mr. Bilusack acting as her representative.

Co-Operators paid Mrs. Bilusack weekly income benefits of $440.22 for the periods of October 3 to October 30, 1992 and December 1, 1992 to July 2, 1993. Co-Operators paid further benefits of $423.29 weekly for the period between July 2 and August 13, 1993. The Insurer thus paid total weekly benefits of $17,947.44 to Mrs. Bilusack.

In her Application for Accident Benefits, Mrs. Bilusack declared that she was not insured under any other sick leave plan or income continuation benefit plan. However, Co-Operators later discovered that she received her regular salary under a sick leave plan through her employment for the period between October 3 and October 30, 1992, and that she also received benefits from Great West Life Insurance Company ("Great West") while absent from work. In December 1993, Mrs. Bilusack remitted $3,948.96 to Co-Operators as partial repayment for the overpayment of weekly benefits. The Insurer estimates an outstanding balance on the overpayment of over $5,000.00.

In July 1993, Mrs. Bilusack applied to Co-Operators for a king size bed along with various bedclothes and accessories. The Insurer paid for the bed and two summer/winter sheets, a duvet and a duvet cover. Co-Operators refused to pay for a mattress pad, bed skirt, two king pillows and shams, three blankets, two bedside lights, and a bookcase to replace the headboard bookshelf.

Mrs. Bilusack filed for mediation to resolve the bedding dispute. The Application for Mediation also contained a claim for renovation of the master bedroom pursuant to section 6(1)(e) of the Schedule, on the ground that the addition of the king size bed had caused the bedroom to become overcrowded and unsafe. Mediation took place on September 16, 1993, at which time Mr. Bilusack estimated the cost of renovation at $50,000.00. Mediation failed to resolve these disputes.

Mrs. Bilusack returned to work on September 7, 1993. Co-Operators did not pay Mrs. Bilusack weekly benefits for the period between August 14 and September 7, 1993, because of the alleged overpayment to her arising from her receipt of benefits under her sick leave plan and from Great West. On September 21, 1993, Mrs. Bilusack submitted an Application for Arbitration in which she raised the following matters in dispute:

1. Calculation of Weekly Income Benefits

2. Supplementary Medical and Rehabilitation Benefits (specifically bedding and renovations)

3. Care Benefits, and

4. Interest on Overdue Payments

In its Response, Co-Operators claimed a repayment due to the receipt of collateral benefits by Mrs. Bilusack. It further stated that the additional bedding sought by Mrs. Bilusack was unreasonable, and that the claim for bedroom renovations was "preposterous."

On November 29, 1993, Mr. Bilusack represented his wife in a pre-hearing telephone conference. Co-Operators was represented by Mr. Stephen Malach. The parties agreed that the issues in dispute were those identified in the Application for Arbitration, plus the repayment claim by the Insurer.

Hearing dates were scheduled, with the consent of the parties, for March 30 and March 31, 1994, in North Bay. The arbitrator confirmed the contents of the pre-hearing discussion by letter dated December 1, 1993, and enclosed a copy of the Commission's Adjournments Policy,² which sets out stringent conditions for granting an adjournment.

The pre-hearing letter also confirmed that Mrs. Bilusack would provide the Insurer with "any additional documents to be presented at the hearing...well in advance of the hearing date..." By letter dated December 2, 1993, Mr. Malach asked Mr. Bilusack to provide receipts for the bedding accessories being claimed, stating "since you have already purchased all of them, it should not be a difficult task to get together the three or four bills involved." Mr. Bilusack's response of December 11, 1993 stated in part:

D. ...You continue to choose to insult. I choose to stand my ground. In view of your written/verbal statements and the implications of Ms. Palmer's Dec 1/93 letter (i.e "Recovery of Legal Expenses" para. 2), we will not be doing anything further on this issue until the Hearing.

E. We continue to be hurt because the space and house-renovations issue is not resolved. I stubbed my toes again today and needed ice to stop the swelling ... My wife has also had run-ins with the furniture and been hurt several times since we purchased the King-bed...

F. Based on the Nov 29/93 Pre-Hearing discussion (10:00-11:15) with Ms. Julaine Palmer, and your Dec 2 letters, we may have to postpone the March 30, 31/94 Arbitration Hearing date, to give us time to search for a lawyer (at $67-84/hr) and strengthen our case...

G. There is now no need to discuss matters on Jan 18/94 (4:30) or any other time before the Hearing, unless The Co-Operators are prepared to dramatically change the settlement offer, [underline emphasis added]

A second pre-hearing discussion was held by telephone on January 18, 1994. Arbitrator Mackintosh ordered Mrs. Bilusack to produce the following information by March 1, 1994:

(a) a complete list of all items claimed by the Applicant under section 6 of the Schedule, including king-size bed accessories... and their cost, along with any supporting documentation upon which the Applicant intends to rely at the hearing...

(b) estimates, statements and supporting documentation related to the claim for home renovations.

By letter dated January 25, 1994, Mr. Bilusack asked Arbitrator Mackintosh to postpone the deadline for productions and adjourn the hearing scheduled for March 30 and 31, 1994:

...This is very new/uncertain ground for us and it greatly adds to our stress at this time in our lives...

...I am unable to cope and am significantly paralyzed from performing my job (and home responsibilities) effectively...

...All I have is a Grade 12 technical education... [Mr. Malach] is a Queen's Counsel and has DIRECT ACCESS T0 SEVEN OTHER LAWYERS (2 are "Certified as a SPECIALIST in Civil Litigation") Please let me get my health and energy back and get help from a lawyer so that 2 accident victims can somehow make this a more level playing field...

...we would be victimized for the third time if we were not given adequate time to seek help and prepare our case...I need a lawyer's help and I need your help to postpone the hearing and the corresponding Mar 1 deadlines, [emphasis added]

Mr. Bilusack faxed a further letter to Arbitrator Mackintosh on January 31, 1994, in which he enclosed a copy of a settlement proposal faxed to Mr. Malach, and stated in part:

If Stephen Malach accepts our terms for a full and final release, then the Mar 30 Hearing would not be required... Cancelling the need for the Mar 30 Hearing depends on Stephen Malach.

If Stephen Malach does not accept our terms for full and final release, I would like equal privilege to cancel the Mar 30 Hearing and have it rescheduled. [emphasis added]

Ms. Sally Baker, Manager of Arbitration Coordination, denied Mr. Bilusack's requests in her response of February 3, 1994:

I confirm that the production order issued by arbitrator Mackintosh stands and the hearing will proceed on March 30 and 31, 1994, as scheduled.

By fax dated February 7, 1994, Mr. Bilusack referred Arbitrator Mackintosh to disputes that had arisen over various figures, and concluded:

I can't trust Stephen Malach because he is not acting in good faith...

These examples prove that I NEED A LAWYER (and more time) to help us defend against a very calculating Queen's Counsel. I should not talk with him any more or write any more letters - UNLESS Stephen Malach authorizes a full/final release as per my Jan 31/94 letter.

Except for the following, all future contact from Stephen Malach should be through my lawyer...[emphasis in original]

By letter dated February 8, 1994, Mr. Malach advised Mr. Bilusack that "it does not appear that we are able to settle this matter" and that Co-operators would not consent to the postponement of the Hearing scheduled for March 30.

Mr. Bilusack then renewed his request for an adjournment of the hearing in a fax dated February 9, 1994, to Mr. Jim Malcolm, Registrar of the Commission, in which he stated in part:

...we are at our limits and literally CANNOT ACCEPT the OIC's decision to hold the hearing on Mar 30. We are not heart-attack prone but we CANNOT STAND the pressure... I was trying to save the insurer the cost of a lawyer but find that I MUST hire a lawyer to defend against a Queen's Counsel.

It took me a while to see it, but Co-op's lawyer is not being fair and honest. I am unable to trust him and need a lawyer to help defend against him...

Co-op's lawyer has deliberately eaten away our time by skilful delay tactics while feigning attempts at settlement.

... Our EXTENUATING CIRCUMSTANCES JUSTIFY POSTPONEMENT of the Mar 1 deadline and Mar 30 Hearing. Please be fair with us and grant the postponement and remove the impossible time-pressures and allow us OUR BASIC RIGHT to FAIR & ADEQUATE REPRESENTATION... [emphasis in original]

Mr. Malcolm responded to Mr. Bilusack by fax dated February 10, 1994, which stated in part:

I explained that it is the Commission's responsibility to provide an expedited dispute resolution process... I noted that the issues in dispute appeared to have been clearly set out in the pre-hearing discussion. The production of the material first agreed to by yourself and later ordered by arbitrator Mackintosh should not be burdensome or unreasonable.

We also had considerable discussion around your decision to engage counsel. It remains my view that you have been and are presently, in a position to engage counsel, if that is your and Mrs. Bilusack's wish.

Your position is that you and Mrs. Bilusack are simply unable to address this issue, in any way, at this time and as a result, you are unable to provide me with any firm direction on when you might be able to have this matter proceed to hearing. Accordingly, we discussed your withdrawing Mrs. Bilusack's application.

I cautioned you counsel for the insurer may strongly oppose your re-filing your application for appointment of an arbitrator at some later date. I indicated that it would be your responsibility at that time to explain to the arbitrator why your action was necessary.

[emphasis added]

By fax dated February 10, 1994, Mr. Bilusack notified Mr. Malcolm of his settlement proposal to Mr. Malach and advised:

If Stephen Malach does not accept the proposal or our terms for full/final settlement, please withdraw our Sept/93 Application for Arbitration. Our lawyer will then "take the insurance company to court" or re-apply for arbitration within 2 years after our first claim was denied.

Our withdrawal is based on unbearable time pressures and Stephen Malach's actions, time delays, requests and comments. . . [emphasis added]

Co-Operators rejected Mr. Bilusack's settlement proposal. By fax dated February 28, 1994, Mr. Bilusack requested Mr. Malcolm to "please withdraw our Sept/93 Application for Arbitration - without Prejudice." This precipitated a five page letter from Mr. Malach, dated March 7, 1994, in which he asserted that the Applicant should not be permitted to withdraw from arbitration unilaterally "on the eve of" arbitration. Mr. Malach argued that if Mrs. Bilusack does not wish to proceed, her claim should be dismissed; in the alternative, if Mrs. Bilusack is permitted to withdraw her claim, the Insurer should nonetheless be allowed to pursue its repayment claim on the scheduled hearing date. Moreover, if Mrs. Bilusack was permitted to withdraw her claim, she should be barred from reinstituting the arbitration at a later date and should be required to pay an assessment fee of $1,000 to the Insurer. Mr. Malach requested that an arbitrator rule on the matter.

Before Mr. Malcolm could respond to Mr. Malach's letter, Mr. Bilusack addressed it in his fax of March 8:

Re: Stephen Malach's INCREDIBLY ABUSIVE March 7 Fax... One main reason why I did not seek a lawyer was because we were negotiating settlement from Nov 18 right up to Feb 10! Yet he FEIGNED that he was negotiating in good faith...

It is true, that I tried to represent our interests before the OIC and entered into a "contract". However, it is blatantly clear that it became an 'UNCONSCIONABLE CONTRACT' because one party has UNFAIR SUBSTANTIAL SUPERIOR BARGAINING POWER over the other.

He appears to be afraid of facing someone of equal specialized knowledge and prefers to BULLY rather than allow professional, mature presentation of opposing views on a level playing field...

As a fair compromise, we are willing to cancel the request to withdraw, if allowed a postponement to a mutually agreed upon date. Allow the case to be settled on merit, not Malach's manipulation. Please schedule the Hearing after June 30 in view of Lois' health and the effect on her students, [emphasis in original]

Mr. Malcolm responded to Mr. Malach's objections in his letter of March 16, 1994:

The Arbitration Unit has consistently allowed individuals to withdraw their Applications for Appointment of Arbitrator and cease all proceedings from that point. In this case, Mrs. Bilusack has cancelled her application and the hearing scheduled for March 30 and 31, 1994 has been cancelled. I have advised Mr. and Mrs. Bilusack you are strongly opposed to any re-application and also that the decision as to whether or not this matter may proceed in a later date will have to be made by an arbitrator, [emphasis added]

Mr. Malach responded by letter dated March 17, 1994, in which he stated that the Registrar did not have the authority or jurisdiction to permit the Applicant to withdraw, and that such order could only be made by an arbitrator. He asserted that it was an abuse of process to permit an applicant to withdraw in the face of outstanding orders of Arbitrator Mackintosh and demanded a conference call in order to argue the matter before an arbitrator. Mr. Malcolm responded by letter dated March 21, 1994:

With respect, no decision has been made or not made by the Registrar regarding Ms. Bilusack's withdrawal. She has simply withdrawn.

With respect to your request for telephone conference call [sic] with an Arbitrator, I have been advised by Senior Arbitrator Naylor that she is not prepared to schedule same.

Should you wish to pursue any issue or matter with respect to Ms. Bilusack's dealings with your client, you may do so in the Courts as provided by the Insurance Act.

The Commission then closed this file. It was re-opened in December of 1994, upon receipt of correspondence from Mr. Bilusack advising that he "would like to re-apply for Arbitration"³ and requesting whether the OIC "requires another filing fee, or anything else from me." Mr. Malcolm responded by letter dated December 19, 1994:

...there are a number of production orders outstanding. When we have been advised by you and Mr. Malach that all outstanding orders have been met, an arbitrator will hear your motion to re-open Mrs. Bilusack's arbitration.

Mr. Bilusack's reply of January 24, 1995, states:

...the only items that Janice Mackintosh requested information about (see her Jan 18/94 letter) were the claims for bedding, and home renovations.

The information for the bedding had already been provided in my July 23/93 letter to The Co-operators (copy attached). That's the only supporting documentation upon which the applicant intends to rely at the hearing in respect of these claims.

See attached Jan 18/95 quote from John Conti Enterprises for home renovations. (He does not know that his estimate is for an insurance claim.) [emphasis in original]

After the Commission forwarded these documents to Mr. Malach, the parties agreed that the issue of whether Mrs. Bilusack could refile for arbitration would be argued by way of written submissions.

Issue #1: Was Mrs. Bilusack's Withdrawal an Abuse of the Commission's Process?

Submissions

Co-operators argues that Mrs. Bilusack abused the Commission's process because she withdrew from arbitration without good reason, and after being denied an adjournment.

Mrs. Bilusack submits that she was forced to withdraw because the Commission unfairly denied her request for an adjournment of the hearing date. Consequently, in order to assess the merits of the withdrawal from arbitration, I must examine the grounds on which she sought the adjournment. Mrs. Bilusac maintains that the adjournment was warranted for the following three reasons:

a) she needed time to retain a lawyer

b) she needed time to meet production requests

c) Mr. Bilusack was near emotional collapse

I will examine each explanation in turn.

A. Time to retain a lawyer:

The first pre-hearing was on November 29, 1993. Arbitrator Palmer, with the consent of the parties, set a hearing date of March 30 and March 31, 1994. In his letter of December 11, 1993, Mr. Bilusack suggested he "may have to postpone" the March 30 hearing date in order to retain counsel. That was well over three months in advance of the hearing, and ample time in which to retain counsel. Yet Mr. Bilusack took no such steps.

As Mr. Bilusack had failed to produce various documents relevant to the hearing, a second pre-hearing was held on January 18, 1994, whereupon Arbitrator Mackintosh ordered production of the disputed items by March 1. Shortly thereafter, Mr. Bilusack requested an adjournment in order to retain counsel. The Registrar's office refused his request on February 3, 1994. Mr. Malcolm confirmed this advice by telephone on February 9, and by his fax of February 10: "you have been and are presently, in a position to engage counsel, if that is your and Mrs. Bilusack's wish." Although the hearing was then nearly seven weeks away, Mr. Bilusack still made no attempt to retain counsel.

In his fax of March 8, 1994, Mr. Bilusack stated that "one main reason why I did not seek a lawyer was because we were negotiating settlement from Nov 18 right up to Feb 10! Yet [Mr. Malach] FEIGNED that he was negotiating in good faith." This contradicts Mr. Bilusack's earlier statements in his letters of December 11, 1993, January 25, 1994, and February 9, 1994 wherein he specifically declared his intention to obtain counsel. Moreover, having agreed to the hearing date of March 30, it was his responsibility to retain counsel sufficiently in advance of the hearing date, regardless of the status of the settlement discussions.

In his written submissions of August 4, 1994, Mr. Bilusack claimed that he and his wife "cannot afford legal counsel" and that there "is no other possible representative." This is inconsistent with Mr. Bilusack's earlier claim that he needed an adjournment in order to retain a lawyer. Alternatively, if he originally intended to retain counsel but later changed his mind, his explanation is inadequate; Arbitrator Palmer, in her letter of December 1, 1993, advised Mr. Bilusack on the recovery of legal expenses. There is no evidence that Mr. Bilusack even consulted with a lawyer to discuss fees before concluding that he could not afford counsel. Nor is there evidence that he made any attempt to engage a non-legal representative.

In my view Mr. Bilusack had both the means and the opportunity to retain counsel (or some other representative), if that had indeed been his wish. I find he failed to do so for reasons other than lack of time or money, and conclude, as did Mr. Malcolm, that Mrs. Bilusack was not entitled to an adjournment on that basis.

B. Time to meet production requests

In the first pre-hearing of November 29, 1993, Mr. Bilusack agreed to provide the Insurer with "any additional documents to be presented at the hearing...well in advance of the hearing date... "Later, due to a perceived insult from Mr. Malach, Mr. Bilusack advised that "he [would] not be doing anything further on [the production] issue until the Hearing". This precipitated the second pre-hearing (on January 18, 1994), and an order that he produce two items by March 1: a) a list of the bedding accessories being claimed, with supporting documentation; and b) an estimate in support of the claim for home renovations.

Notwithstanding that Mr. Bilusack had over three months from the original pre-hearing date and six weeks from the second pre-hearing date to produce these items, he made several requests for a postponement of the March 1 deadline, arguing that it left insufficient time to produce the documents. The Commission denied his request on February 3. In his letter of February 10, Mr. Malcolm advised Mr. Bilusack that "the production of the material first agreed to by yourself and later ordered by Arbitrator Mackintosh should not be burdensome or unreasonable." Nonetheless, Mr. Bilusack failed to produce any documents before he withdrew his application on February 28, 1994.

When Mr. Bilusack moved to refile his wife's application, Mr. Malcolm demanded by letter dated December 19, 1994 that he first meet "al l outstanding [production] orders". In his response of January 24, 1995, Mr. Bilusack confirmed that the "only" items on which production was ordered were "the claims for bedding, and home renovations." He advised that the information for the bedding had already been provided in his letter of July 23/93 to Co-operators, and that he had nothing further to add. With respect to the claim for home renovations, he attached a single page quotation dated January 18, 1995, from John Conti Enterprises.

It is apparent that Mr. Bilusack possessed the documents in support of the bedding claim for more than seven months before the hearing, and almost five months before the production order of January 18, 1994. Why then did he request an extension of time for productions and an adjournment of the hearing date? Although he had yet to obtain an estimate for the home renovations, this was not an onerous demand: Mr. Bilusack satisfied it within five weeks of Mr. Malcolm's request of December 19, 1994.

I conclude that the production demands made on Mr. Bilusack were neither difficult nor unreasonable, and did not warrant an adjournment of the hearing.

C. Emotional collapse

Mr. Bilusack maintains that he was forced to withdraw because he was "seriously in danger of emotional collapse due to an accident-induced sleep disorder; Stephen Malach's tactics; [his] heavy workload; and [his] intense nature." He states that under these circumstances, the Commission's refusal to adjourn the hearing was "unbearably burdensome and impossibly unreasonable."

The Commission's adjournments policy, which was sent to Mr. Bilusack on December 1, 1993, states that adjournment requests "will be considered...in cases of personal emergency e.g. serious illness, death in family, etc." Although I have no doubt that Mr. Bilusack's sleep disorder, heavy workload, and intense nature added to his stress, he did not produce any medical evidence suggesting that these factors amounted to a "personal emergency" that prevented him from preparing for or attending at the hearing. The issues were well defined at the first pre-hearing on November 29, 1993, and the parties then agreed to a hearing date over three months into the future. This was ample time in which to prepare for the hearing, particularly where, as here, the production demands were neither onerous nor unreasonable.

Mr. Bilusack also alleges improper conduct by the Insurer, which contributed to his emotional stress. He raised several examples of what be believes was "bullying" and "manipulative" conduct by the Insurer:

(i) Bad Faith Negotiations

The parties exchanged settlement offers in the months leading up to the hearing date. Although they eventually agreed on the value of the claim for bedding accessories, other claims remained in dispute. Co-Operators ultimately refused to pay for even the bedding accessories without a comprehensive settlement of all outstanding issues, including its claim for repayment. Mr. Bilusack infers from this that Mr. Malach has "deliberately eaten away our time by skilful delay tactics while feigning attempts at settlement" and submits that this "clearly shows Stephen Malach...failed to Negotiate in Good Faith".

I do not agree with that characterization of Co-Operators' or its counsel's conduct. There is no obligation on a party to settle issues on a piecemeal basis. Moreover, both an insurer and an applicant may have sound business reasons to negotiate an "'all-inclusive" settlement. This saves time and money and relieves uncertainty over how outstanding claims will be adjudicated. Although the parties in this case eventually agreed on the value of one portion of the claim, Co-Operators consistently approached settlement on an all-inclusive basis. This approach, though not pleasing to Mr. Bilusack, does not amount to bad faith or "feigning attempts at settlement."

(ii) Dishonest Statements

One of the disputes in this case concerns the amount of weekly benefits to which Mrs. Bilusack is entitled. Mr. Bilusack argues that Mr. Malach submitted inaccurate and misleading figures in support of an alleged overpayment by the Insurer, and was therefore "not being fair and honest."

Given that the amount of benefits is in dispute, it is not surprising that the parties presented different figures during the negotiations leading up to the hearing. Differences in position do not, however, in themselves amount to dishonesty. If Mr. Bilusack disagreed with the Insurer's figures, his remedy was to argue that matter before the arbitrator at the hearing and attempt to persuade the arbitrator of his views; if, in addition, he believed that the Insurer acted improperly, he could request a special award⁴ at the hearing. Mr. Bilusack was not, however, entitled to conclude unilaterally that the Insurer was dishonest and that he could therefore withdraw from the hearing process.

(iii) Unconscionable Bargaining

Mr. Bilusack submits that the Insurer has an unfair advantage because it is represented by trained and experienced counsel. He further submits that Mr. Malach exploited this advantage by outmanoeuvering him with "'heavyweight" tactics, backed by "an 8-member law firm (that boasts another Q.C. & MPP and 2 'Certified as a specialist in Civil Litigation by the Law Society of Upper Canada')" He concludes that he was party to an "unconscionable contract" because the Insurer had "unfair substantial superior bargaining power."

Counsel's experience and specialization in personal injury, though certainly an advantage, are not in themselves unfair, unless they are used improperly. This is particularly so where, as here, I have already found that Mr. Bilusack had ample opportunity to retain counsel on behalf of his wife. I agree that he and Mrs. Bilusack were nonetheless entitled to courteous and fair treatment from the Insurer and its counsel throughout the hearing process. However, although the Insurer and its counsel defended the claim vigorously, even aggressively at points,

I do not find any wrongdoing on their part. They were entitled to forcefully raise whatever defences were available to them within the law, and did so.

I do not accept Mr. Bilusack's allegations of emotional stress or improper conduct by Co-Operators or its counsel as a reasonable basis for an adjournment.

Findings

I conclude that Mrs. Bilusack has failed to establish any reasonable grounds for an adjournment of the hearing, and therefore find that she had no justification for withdrawing from arbitration.

I further find that Mrs. Bilusack has abused the Commission's process. She reneged on her undertaking to make productions, despite having the majority of them in her possession for several months. Her actions necessitated a second pre-hearing and a formal Order for production, which she continued to defy even after her request for an extension of the deadline was (properly) denied.

She later withdrew from the hearing process without good reason and in the face of a denial of her adjournment request. Her withdrawal was a deliberate attempt to subvert the Commission's process and substitute her own wishes for a postponement.

Issue #2: What Is The Effect Of Such Abuse On Her Application For Re-filing?

Submissions

Counsel for Co-operators argues that Mrs. Bilusack should not be permitted to refile for arbitration, under any conditions. He states that her withdrawal following the Commission's denial of an adjournment shows contempt for the hearing process. To re-admit her, he submits, would condone such conduct and encourage applicants to withdraw and refile at whim.

Mr. Bilusack argues that his wife should be permitted to re-file without any conditions. He insists that neither he nor Mrs. Bilusack have abused the process. His written submissions do not address what effect, if any, a finding of abuse of process should have on Mrs. Bilusack's application for refiling.

The Law

Neither the Insurance Act, the Schedule, nor the former Dispute Resolution Practice Code deal specifically with the issues of withdrawal and refiling. The revised Practice Code came into effect on August 1, 1995; although it is also silent on the question of refiling, it does address the issue of withdrawal:

66. WITHDRAWAL

66.1 An applicant may seek permission to withdraw all or part of an application:

(a) by serving on the parties a request to withdraw the application that is signed by the applicant or the applicant's representative; and

(b) by filing the request to withdraw the application together with a Statement of Service in FORM D; or

(c) at the hearing.

66.2 The adjudicator may permit an applicant to withdraw all or part of an application if the other parties agree.

66.3 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.

The wording of the revised Code suggests that an applicant cannot withdraw and refile unilaterally. Arbitrators may now, as a term of the withdrawal, preclude or attach conditions to refiling. In my view the revised Code does not, however, apply to this case; although both the written submissions and this decision were delivered after the revised Code came into effect, Mrs. Bilusack withdrew her claim before August 1, 1995. It would be unfair to assess her conduct under provisions which did not exist at the time she withdrew and of which she could not be expected to have had notice.

None of the Commission decisions to date has directly considered the issue of refiling. Before the Code was revised, arbitrators in some cases⁵ permitted applicants to withdraw from arbitration without conditions. Arbitrators have further held that once an applicant withdraws, the insurer cannot proceed with its claim for repayment on a "stand alone" basis.⁶ However, the question of whether an applicant can subsequently refile on identical issues against the Insurer's objection is novel.⁷

Although neither the Insurance legislation nor the case law deals specifically with refiling, there is ample authority⁸ that an administrative tribunal has the power to prevent abuses of its process. Section 23(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22⁹ provides:

23. (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.

In my view, section 23 on its face authorizes me to prohibit Mrs. Bilusack from refiling for arbitration. I have already found that Mrs. Bilusack abused the Commission's process by withdrawing without reason. A denial of her request to refile would "prevent abuse of [the Commission's] processes" by insuring that she no longer had recourse to its resources.

At the same time, I am mindful that Mrs. Bilusack has not yet had a hearing on the merits of her claim.¹⁰ My goal is to balance her right to a fair hearing with the necessary measures to discourage further abuse. I believe that the prejudice that would result from a complete denial of a hearing outweights the harm caused to the Insurer by permitting her to refile. This is particularly so where, as here, the applicant withdrew her claim in the absence of any rules governing the withdrawal or refiling of applications. In this circumstance, I find it would be unfair to prohibit her outright from refiling. I conclude, therefore, that Mrs. Bilusack may re-file her application for arbitration.

Although I have permitted Mrs. Bilusack to refile, I find the concerns expressed by the Insurer have some merit. It does not serve the dispute resolution system to allow applicants to withdraw at will and later refile on identical issues. In order to discourage such abuse, arbitrators have discretion under subsection 282 (11.2) of the Act to impose costs:

(11.2) 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. [emphasis added]

Co-Operators was assessed the amount of $1,000.00 in this arbitration, under section 14 of the Insurance Act and Ontario Regulation 220/91.

I have already concluded that Mrs. Bilusack abused the Commission's process. Under subsection 282 (11.2) of the Insurance Act I have the authority, upon such a finding, to require her to pay an amount up to the Insurer's assessment fee, being $1,000. In this case, I have no hesitation in requiring her to pay the full amount of the Insurer's assessment fee as a precondition to proceeding with arbitration. By withdrawing from arbitration after her adjournment request was denied, she gained indirectly what she could not achieve directly. She now wishes to arbitrate the identical issues, when it better suits her schedule. Moreover, her actions caused both the Insurer and the Commission to expend needless time and resources in repeated pre-hearings, demands for adjournments, and groundless complaints of misconduct. Finally, her waste of Commission resources has delayed other applicants from exercising their rights before this tribunal.

I note that $1,000 is the maximum amount that I may award under the Act; if I had the authority, I would have ordered a higher amount, as I am confident the Insurer has spent far more than $1,000 in needless time and expense because of Mrs. Bilusack's conduct.¹¹ This may well be relevant if Mrs. Bilusack proceeds with arbitration; the awarding of expenses to applicants, under section 282(11) of the Insurance Act, is discretionary. I expect that an arbitrator may be very reluctant to award expenses in a subsequent proceeding given Mrs. Bilusack's course of conduct.

Order:

1. Mrs. Bilusack must pay the Insurer $1,000.00 before proceeding with arbitration, under subsection 282(11.2) of the Insurance Act.

February 13, 1996

Deena Baltman

Arbitrator

Date

SCHEDULE A

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. 2Schedule "A"
3. 3Although Mr. Bilusack's letter did not identify on which issues he sought to refile, it is clear from his submissions that he wishes to arbitrate all outstanding issues.
4. 4Under section 282(10) of the Insurance Act, if an arbitrator finds that an insurer has "unreasonably withheld or delayed payments," the arbitrator is obliged to award the applicant a special lump sum payment in addition to any benefits to which he is entitled
5. 5Elizabeth Aladejebi and State Farm Mutual Automobile Insurance Company, September 27, 1994, OIC File No. A-005933; Comfort Ayertey and the Toronto Transit Commission, June 1, 1995, OIC File No. A-004077; Carlos and Blanca Ferreyra and Royal Insurance Company, July 9, 1992, OIC File Nos. A-000301, A-000325 and A-000384.
6. 6Aladejebi (supra note # 5)
7. 7In Ayertey (supra note # 5), the Insurer objected to the applicant refiling on narrower grounds than those in the original application, but not to the act of refiling per se.
8. 8In Sawatsky v. Norris (1992), 1992 CanLII 7634 (ON CTGD), 10 O.R.(3d) 67 (Gen. Div.) Misener, J. suggested that even without the express power to deal with abuses of process under s.23 of the SPPA, a review board under the Mental Health Act "has the common law right to prevent abuse of its process, absent an express statutory abrogation of that right". This view was reaffirmed by Commissioner Wright in an inquiry under the Freedom of Information and Protection of Privacy Act [IPC Order M-618/October 18, 1995] where he found that he had "the necessary authority to control...abuse of that process which would frustrate the intent of the Legislature"]
9. 9This legislation sets out minimum procedural rules for administrative tribunals.
10. 10By contrast, in Sawatsky (supra note # 8) the Board declined to hold a hearing because the applicant had recently had a hearing on the identical issue.
11. 11I note that when Mrs. Bilusack moved to refile her application, the Commission did not request a further filing fee from the Insurer. Had it done so, I would have ordered Mrs. Bilusack to pay such fee, in addition to the $1,000 sum already ordered..