Neutral Citation: 1997 ONICDRG 117

OIC A96-001561

ONTARIO INSURANCE COMMISSION

BETWEEN:

GREGORY LONG

Applicant

and

ZURICH INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Issues:

The Applicant, Gregory Long, was injured in a motor vehicle accident on August 25, 1990. He applied for and received statutory accident benefits from Zurich Insurance Company ("Zurich"), payable under Ontario Regulation 672.¹ Zurich paid weekly income benefits pursuant to section 12(1) of the Schedule for 156 weeks and by letter dated August 24, 1993 refused to pay further weekly income benefits. The parties were unable to resolve their disputes through mediation and Mr. Long applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue in this hearing is:

1. Is Mr. Long entitled to withdraw his Application for Arbitration, and if so, on what terms?

Result:

1. Mr. Long is entitled to withdraw his Application for Arbitration.

2. Mr. Long shall pay Zurich its assessment fee in the amount of $2,000.

Hearing:

The hearing of the preliminary issue was held at the offices of the Ontario Insurance Commission in North York, Ontario, on June 9, 1997.

Present at the Hearing:

Applicant: Gregory Long

Mr. Long's Representative: Joseph Falconeri, Barrister and Solicitor

Zurich's Representative: J. Claude Blouin, Barrister and Solicitor

Zurich's Officer: Jennifer Wilde

Lou Ferro's Representative: Robert McCartney, Barrister and Solicitor

Before: William J. Renahan, Arbitrator

The Applicant seeks permission pursuant to section 67 of the Dispute Resolution Practice Code to withdraw his Application for Arbitration. The parties agreed on the relevant evidence and the matter proceeded by way of submissions.

The Applicant, through his former solicitor, Lou Ferro, filed an Application for Arbitration in which he claimed weekly income benefits. He filed the Application more than two years after Zurich refused to pay further weekly income benefits.² On January 27, 1997 the Director's Delegate released his decision in Kirkham and State Farm Mutual Automobile Insurance Company (January 27, 1997), OIC P96-00069. That decision dealt with the two-year limitation period in section 281(5) of the Insurance Act R.S.O. 1990, c. I.8. At the pre-hearing of this matter on February 13, 1997, Mr. Long indicated that he wanted to withdraw his Application for Arbitration and proceed with his claim for accident benefits in court. He said that he intends to make an alternate claim in the same court proceeding against his former solicitor for negligently missing the two-year limitation period.

I find no real factual dispute between the parties on this preliminary issue. Zurich wants Mr. Long to proceed with his Application for Arbitration because it feels that it is likely to win on the limitation defence at the Ontario Insurance Commission. Mr. Long now wants to proceed in court where he feels that he has a better chance of overcoming the limitation defence.

Zurich relied on Christakos v. Dominion of Canada General Insurance.³ In that case the plaintiff commenced an Application for Arbitration for income replacement benefits and then commenced a court action for income replacement benefits and for loss of earning capacity benefits. The Court denied the plaintiff's request for an order staying the arbitration stating that: "Once the arbitration has been chosen, that route must be proceeded with." However, that statement was made where the Court did not have jurisdiction to stay the arbitration and did not have jurisdiction to hear some issues raised in the court action because the plaintiff had not mediated those issues. The present situation is not comparable.

I find no reason why I should compel Mr. Long to continue with his arbitration proceeding. He therefore is entitled to withdraw his Application for Arbitration.

In Chapman(s) and Allstate Insurance Company of Canada and Wellington Insurance Company (October 6, 1994), OIC P-001897 and P-001898, the Director wrote that "The Commission tribunals have an inherent power to control their own processes, and as such, are not bound to accept a withdrawal as putting an end to a case without further orders or consequences." I heard no evidence relevant to the issue of what terms, if any, I should attach to the withdrawal. The only submission was that the trial judge who hears the matter should determine costs.

Section 282(11.2) of the Insurance Act 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. 1993, c. 10, s. 33.

Under section 281(1) of the Insurance Act, an insured person may bring a proceeding in court or may refer the matter to an arbitrator. When Mr. Long chose to apply for arbitration at the Commission, Zurich paid the Ministry of Finance an assessment fee of $2,000 to respond to the application.⁴ Mr. Long then decided to withdraw his Application for Arbitration when he thought he had a better chance of success in another forum. Zurich has incurred an unnecessary expense due to Mr. Long's initial choice to use the arbitration process. In my view, Mr. Long's decisions to commence and then withdraw an Application for Arbitration amount to an abuse of process. He therefore must recompense Zurich for the $2,000 assessment fee it paid to respond to his Application for Arbitration. Payment of the $2,000 is not a condition of the withdrawal. However, if Mr. Long commences another Application for Arbitration for weekly income benefits arising out of the motor vehicle accident of August 25, 1990, Mr. Long cannot proceed with the arbitration so long as the $2,000 remains unpaid.

Order:

1. Gregory Long is permitted to withdraw his Application for Arbitration dated September 17, 1996 and that Application is hereby withdrawn.

2. Zurich Insurance Company is entitled to recover from Gregory Long $2,000.

3. Gregory Long may not proceed with another Application for Arbitration against Zurich Insurance Company concerning his entitlement to weekly income benefits arising out of the motor vehicle accident of August 25, 1990, unless he first pays Zurich the $2,000 ordered in paragraph 2.

June 25, 1997

William J. Renahan 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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Zurich sent Mr. Long a notice of refusal to pay further weekly benefits dated August 24, 1993. Mr. Long filed an Application for Arbitration dated November 15, 1995 which the Commission returned on the basis it had no jurisdiction to deal with the claim. Mr. Long filed a second Application for Arbitration dated September 17, 1996. He seeks to withdraw this Application.
3. 3[1997] O.J. 1279, March 27, 1997, Ont. Ct. (Gen. Div.).
4. 4Pursuant to section 14 of the Insurance Act, R.S.O. 1990, c. I.8. Effective April 1, 1997 the assessment fee was increased to $3,000.