Neutral Citation: 1999 ONFSCDRS 116

FSCO A98-000917

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

HARRINAUTH DEESASAN

Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA

Insurer

REASONS FOR DECISION

Before:

K. Julaine Palmer

Heard:

June 15, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto

Appearances:

Mr. Deesasan did not appear.

Carla Bocci

Brian G. Grant for Guarantee Company of North America

Issues:

Mr. Deesasan claimed he was injured in a motor vehicle accident on June 25, 1996. He applied for statutory accident benefits from Guarantee Company of North America ("Guarantee"), payable under the Schedule.¹ Guarantee denied Mr. Deesasan was entitled to any benefits. The parties were unable to resolve their disputes through mediation, and Mr. Deesasan applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Did Mr. Deesasan sustain an impairment within the meaning of section 1 of the Schedule as a result of an accident? The Insurer denies that Mr. Deesasan was involved in an "incident" involving "the use or operation of an automobile."

If Mr. Deesasan is found to have been involved in an "accident," the following issues are also in dispute:

1. Is Mr. Deesasan entitled to receive other disability benefits from July 2, 1996, and ongoing pursuant to section 19 of the Schedule?

2. Is Mr. Deesasan entitled to the following supplementary medical expenses:

(a) physiotherapy and chiropractic expenses, claimed pursuant to paragraph 36(1)(b) of the Schedule;

(b) a back support, heating pad and cane, claimed pursuant to paragraph 36(1)(f) of the Schedule;

(c) transportation to and from treatment centres, claimed pursuant to paragraph 36(1)(g) of the Schedule; and,

(d) massage therapy and heating/cooling rubs, claimed pursuant to paragraph 36(1)(h) of the Schedule?

3. Is Mr. Deesasan liable to pay an amount to Guarantee that does not exceed the amount assessed against Guarantee in respect of the arbitration, pursuant to subsection 282(11.2) of the Insurance Act, R.S.O. 1990, c. I.8, as amended, because he commenced an arbitration that is frivolous, vexatious or an abuse of process?

4. Is Guarantee liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Deesasan?

5. Is Guarantee liable to pay Mr. Deesasan's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

6. Is Mr. Deesasan liable to pay Guarantee's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

Mr. Deesasan also claims interest on any amounts owing.

Result:

1. The arbitration is dismissed.

2. Mr. Deesasan must pay Guarantee $3,000 pursuant to subsection 282(11.2) of the Insurance Act, R.S.O. 1990, c. I.8, as amended, because he commenced an arbitration that is frivolous, vexatious or an abuse of process.

3. Mr. Deesasan must pay Guarantee's expenses in respect of the arbitration under section 282(11) of the Act.

EVIDENCE AND ANALYSIS:

Mr. Deesasan claimed he was injured in an accident on a bus on June 25, 1996. Guarantee denied the incident ever occurred and refused his claim for accident benefits. Mr. Deesasan applied for mediation in the fall of 1996. The mediation was not successful in resolving the dispute. In June 1998, Mr. Deesasan commenced this arbitration proceeding with an application filed by his lawyer. Shortly after that neither his lawyer nor the Commission was able to contact him. Correspondence sent to Mr. Deesasan's last known address was returned marked "moved." He did not attend the pre-hearing discussion in December 1998 or this hearing, nor did he comply with production orders made at the pre-hearing.

At the pre-hearing discussion, Ms. Bocci advised the arbitrator that she had been unable to locate her client. The pre-hearing arbitrator wrote the following in his pre-hearing letter:

Ms. Bocci advised that she is unable to locate her client. By letter dated December 14, 1998 and received by the Commission at 6:26 p.m. that same day, Ms. Bocci enquired as to the proper steps for her firm to be removed as solicitors of record.

Pursuant to section 9.5 of the Dispute Resolution Practice Code, where a representative wishes to withdraw from an adjudicative proceeding and the consent of the principal is not forthcoming, an adjudicator may permit the representative to withdraw, subject to such terms as the adjudicator considers appropriate.

As Ms. Bocci was still counsel of record, we proceeded with the pre-hearing discussion. I, however, requested of Ms. Bocci that if she wished to be removed from the record, that she provide an affidavit confirming that she has been unable to contact Mr. Deesasan either by writing to his last known address by registered and ordinary mail, phoning his last known home and/or work telephone numbers, or contacting directory assistance and endeavouring to find a new telephone listing for him in the 416 or 905 area code areas.

Should Ms. Bocci be unable to locate the Applicant and should the affidavit material be satisfactory, I will issue an order removing Ms. Bocci as solicitor of record upon the order being served on Mr. Deesasan and on the Insurer as specified, and proof of service being filed with the Commission.

The hearing was scheduled to begin at 10:00 a.m. on June 15, 1999. Mr. Deesasan did not appear. Ms. Bocci appeared and filed with the Commission her affidavit sworn June 7, 1999, deposing that she had made unsuccessful attempts to contact her client by telephone and in writing. She had made inquiries for telephone listings in his name in the Toronto, Mississauga, and Hamilton areas, and received the advice that there were no listings in his name. Ms. Bocci deposed that Mr. Deesasan had not communicated with her for approximately one year and she was unaware of his whereabouts and unable to obtain instructions from him. I accepted Ms. Bocci's affidavit and granted her request to be removed from this proceeding as Mr. Deesasan's representative.

Guarantee requested an order dismissing the arbitration and a further order, under subsection 282(11.2) of the Insurance Act, requiring Mr. Deesasan to pay the assessment Guarantee paid to participate in this arbitration,² because he commenced an arbitration that is an abuse of process. Mr. Deesasan was warned about this possibility in the pre-hearing arbitrator's letter dated December 30, 1998. Guarantee submitted that the application was, from the outset, a frivolous and vexatious process which Mr. Deesasan started, then failed to participate in. Guarantee called no evidence in support of its submissions.

Section 34.5 of the Dispute Resolution Practice Code and section 7 of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, as amended, authorize an arbitrator to proceed with a hearing in the absence of a party, where notice of the hearing has been given. In this case, the Notice of Hearing was mailed to Mr. Deesasan in care of his lawyer. I have no evidence that Mr. Deesasan was aware of the hearing date or even the pre-hearing date six months earlier. However, proof of actual notice is not required by either the Code or the SPPA. In similar circumstances, some arbitrators have not proceeded with a hearing and made no order with respect to an applicant's claim for benefits.³ Other arbitrators have proceeded with a hearing to consider the merits of the claim, in the Applicant's absence.⁴ However, in the circumstances of this case, I am willing to dismiss Mr. Deesasan's claim. I do not believe a stay of the proceeding is the appropriate course, since I find Mr. Deesasan has made no attempt whatsoever to follow through on the initial application for arbitration, begun over a year ago. With respect to the merits of Mr. Deesasan's case, I have absolutely no evidence.

I also find that by his conduct Mr. Deesasan has constructively withdrawn his application. Mr. Deesasan moved without notifying his lawyer or the Commission and failed to attend the pre-hearing. He has made no efforts to keep the Commission or his lawyer advised of his whereabouts. He has essentially abandoned his claim. I find his conduct amounts to a constructive withdrawal as described by Arbitrators Seife and Makepeace in the Quattrocchi⁵and Dubajic⁶ cases, respectively.

Assessment:

I find that Mr. Deesasan's conduct amounts to an abuse of process. Since he failed to provide notice that he was no longer proceeding with his claim, the Commission, Guarantee, and his own lawyer have wasted time and money on phone calls, correspondence and a needless pre-hearing. Section 282(11.2) of the Insurance Act gives an arbitrator discretion to award the insurer the amount of its assessment, where an applicant commences an arbitration that is "frivolous, vexatious or an abuse of process." Mr. Deesasan is required to pay the Insurer's assessment of $3,000.

EXPENSES:

Guarantee claims its expenses of the arbitration process. Amendments to the Insurance Act in 1996 permit an arbitrator to award expenses in favour of the insurer. Rule 73 of the Dispute Resolution Practice Code sets out several criteria for the arbitrator's consideration. Under subparagraph 73.2(b), an arbitrator may consider any conduct of a party that "tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders." Under subparagraph 73.2(c), an arbitrator may consider whether the proceeding or any position taken was "manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process." I find that Mr. Deesasan's conduct falls within both those criteria for the reasons set out above. Mr. Deesasan did not participate in this arbitration in any way after instructing his lawyer to file the application. Guarantee is entitled to its expenses in an amount to be assessed.

June 23, 1999

K. Julaine Palmer Arbitrator

Date

Neutral Citation: 1999 ONFSCDRS 116

FSCO A98-000917

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

HARRINAUTH DEESASAN

Applicant

and

GUARANTEE COMPANY OF NORTH AMERICA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Deesasan's application for arbitration is dismissed.

2. Mr. Deesasan shall pay Guarantee its assessment fee of $3,000.

3. Mr. Deesasan shall pay Guarantee its expenses of the arbitration proceeding, in an amount to be assessed.

June 23, 1999

K. Julaine Palmer Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98.
2. 2The assessment is established under section 14 of the Insurance Act and set out in section D of the Dispute Resolution Practice Code — Third Edition (April 15, 1997).
3. 3Muller and Zurich Insurance Company, (FSCO A97-000666, November 13, 1998).
4. 4Hersi and American Home Assurance Company, (FSCO A97-001405, Feburary 9, 1999).
5. 5Quattrocchi and State Farm Mutual Automobile Insurance Company, (OIC A-006854, June 11, 1996).
6. 6Dubajic and State Farm Mutual Automobile Insurance Company, (OIC A96-001133, October 21, 1997).