Janice Mark v. Dominion of Canada General Insurance Company, 1999 ONFSCDRS 124

Neutral Citation: 1999 ONFSCDRS 124 FSCO A96-000341

BETWEEN:

JANICE MARK Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Shemin Manji

Heard: Written submissions were received on February 16, March 12 and March 29, 1999

Appearances: David S. Wilson for Ms. Mark Claire E. Walker for Dominion of Canada General Insurance Company

Issues:

Mr. Tik Wan Kwan died as a result of a motor vehicle accident on March 30, 1995. At the time of the accident, Mr. Kwan was living in a common-law relationship with Ms. Mark. Ms. Mark applied for death benefits, as both a spouse and a dependant. In a decision dated January 27, 1999, I dealt with her claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Ms. Mark is entitled only to one-half of the death benefit under subsection 51(1) of the Schedule because Mr. Kwan had two spouses at the time of the accident.
Ms. Mark is not entitled to an additional benefit under subsection 51(4)(a) of the Schedule because she was not a dependant of Mr. Kwan at the time of the accident.
Dominion shall pay interest on one-half of the minimum benefit of $25,050 for the period August 8, 1995 to January 15, 1996. Dominion shall pay interest on the further sum of $12,661.44 for the period December 13, 1995 to July 3, 1996 and July 23, 1996 to November 14, 1996. Dominion shall pay interest at the rate set out in section 68 of the Schedule.

The issue in this further hearing is:

Is Ms. Mark entitled to her expenses incurred in respect of the arbitration proceeding?

In its submissions on expenses, Dominion also sought an award under subsection 282(11.2) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, in the amount of its assessment fee.

Result:

Ms. Mark is not entitled to her expenses in respect of the arbitration proceeding.
Dominion is not entitled to an award under subsection 282(11.2) of the Insurance Act.

EVIDENCE AND ANALYSIS:

Is Ms. Mark entitled to her expenses?

This arbitration was commenced prior to the amendments to the Insurance Act and Schedule which allow arbitrators to award expenses to either the insured person or the insurer. Prior to the amendments, only insured persons were entitled to expenses.

Ms. Mark claims that she is entitled to payment of her expenses in accordance with the Regulations and relies on the decision of Senior Arbitrator Naylor in McCormick and Economical Mutual Insurance Company,² in support of her position.

In McCormick, Senior Arbitrator Naylor held that the discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. She held that the arbitration process has been established under the Insurance Act in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding statutory accident benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case. Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the Application for Arbitration was manifestly frivolous or vexatious, or the applicant's conduct unreasonably prolonged the proceedings.

The criteria suggested by Senior Arbitrator Naylor in McCormick for the exercise of the discretion to award expenses were approved by the Director of Arbitrations in the appeal decision, Calogero and The Co-operators General Insurance Company³. However, in Allison and Markel Insurance Company of Canada,⁴ Director's Delegate Naylor stated that arbitrators are not restricted in applying the criteria set out in McCormick, nor should the words used in the decision be subject to the same rigorous standard of interpretation as statutory language, which they are not. She pointed out that in Calogero, the Director did not state that the McCormick criteria should be treated as fixed rules, or that they are the only factors that may be considered. She noted that arbitrators have built on the criteria set out in McCormick and expenses have been denied, for example, where the claim is found to have been without merit, in the case of fraud or dishonesty or when documents have been fabricated.

In the circumstances of this particular case, for the reasons to follow, I do not find it appropriate to award Ms. Mark her expenses of the arbitration proceeding.

A very significant portion of the hearing was devoted to hearing evidence in response to Ms. Mark's claim that she was the only spouse of Mr. Kwan at the time of the accident. I found this particular aspect of the claim to be without merit.

Ms. Mark submits that it was not unreasonable for her to take the position which she took in this proceeding given the statement which she claimed had been made to her by the deceased, Mr. Kwan, throughout their relationship, to the effect that he and Chi Wah Tang (Mrs. Kwan) had simply lived together and had never been married. I disagree. In my decision, I found Ms. Mark's evidence to be contradictory on exactly what Mr. Kwan told her about his relationship with Mrs. Kwan. Ms. Mark proceeded with the arbitration of this issue in the face of overwhelming evidence, of which she had knowledge in advance of the hearing,⁵ that a ceremony of marriage had taken place in Yuen Village in China in 1941 followed by a period of lengthy cohabitation by Mr. and Mrs. Kwan during which they had seven children. Further, there was no evidence that a divorce had been granted to either party.

Ms. Mark submits that additionally, and significantly, it must be understood that from her perspective the loss of her spouse for many years was obviously, for her, a highly emotional matter. She submits that one must appreciate how she must have felt when Mrs. Kwan was claiming a right to share the Death Benefit with her. She submits that she devoted years of her life to the deceased, Mrs. Kwan having had virtually no contact with him for many years, and accordingly, it could not be said to have been unreasonable for her to require this matter to go to a full hearing. Ms. Mark submits that her views in this regard were buttressed by the willingness of members of Mrs. Kwan's family to testify on her behalf in respect of issues pertaining to Mrs. Kwan's credibility. She submits that for this reason alone, the position she took could not be described as improper.

Again, I disagree with Ms. Mark's position. Given the overwhelming evidence of marriage between Mr. and Mrs. Kwan and the clarity of the law applicable in this case, including the definition of spouse, I find it was not reasonable for Ms. Mark to require this matter to go to a full hearing. The law is clear that no matter how long the deceased may have resided in a common-law relationship with Ms. Mark, if he was married to another woman at the time of his death, even if they had been separated for a long time, that woman, for the purposes of the Schedule, is a spouse of the deceased and the Death Benefit is to be "...divided equally between or among ..." the two spouses.⁶

Further, I do not accept Ms. Mark's position that because some members of Mrs. Kwan's family were willing to testify on her (Ms. Mark's) behalf in respect of issues pertaining to Mrs. Kwan's credibility, for that reason alone the position taken by Ms. Mark could not be improper. Given the overwhelming evidence of marriage between Mr. and Mrs. Kwan and the clarity of the law on this issue, the primary effect, whether deliberate or not, of Ms. Mark's insistence in proceeding with this issue was to cause Mrs. Kwan distress. It forced Mrs. Kwan into the difficult and uncomfortable position of having to give testimony as to the validity of her marriage and the legitimacy of her seven children. After she gave her testimony, her credibility was challenged by two of her sons and a daughter-in-law called to testify on Ms. Mark's behalf. The hearing on this issue pitted mother against children. It was clear from Mrs. Kwan's reaction when she was listening to her sons testify against her that it was painful, embarrassing and distressing for her and it was sad to watch.

I also decline to award Ms. Mark her expenses of the arbitration proceeding because her conduct and that of her counsel unreasonably prolonged the arbitration hearing.

Although I determined that at the time of the accident Ms. Mark was not a dependant of Mr. Kwan, there was some merit to her claim that she was a dependant. However, I found that her conduct of this issue unreasonably prolonged the arbitration hearing. This was a very lengthy hearing. The length of the arbitration hearing could have been shortened if Ms. Mark had provided Dominion with copies of her income tax returns indicating that she owned (in whole or in part) three properties, two being income-generating commercial properties and the other a residence, well in advance of the arbitration hearing rather than the day prior and if she had, after the hearing commenced, cooperated in Dominion's efforts to obtain evidence in respect of her net worth, which was relevant to her dependency claim. Ms. Mark refused to allow Dominion's expert, T. McCormick & Associates, access to her properties to determine their fair market value and fair market rent as of the date of death of Mr. Kwan. Ms. Mark's objection necessitated a hearing and a ruling on the question of whether Dominion was entitled access to her buildings such that an expert's report could be commissioned. I held that, in the absence of Ms. Mark's consent, I had no authority to require someone to enter her properties for this purpose. Therefore, the appraisals that were tendered by Dominion were qualified appraisals, based only on an inspection of each property from the street. Although the burden of proof on this issue was on Ms. Mark, she adduced no expert evidence in respect of her net worth and because she did not cooperate with Dominion, I did not get a true picture of her net worth.

The length of the hearing was also unreasonably prolonged by the conduct of Ms. Mark's counsel.

Throughout the hearing, Ms. Mark's counsel made numerous evidentiary objections. The objections were often followed by lengthy submissions as to the admissibility of documents that Dominion sought to file and of viva voce evidence being elicited by Dominion. Many of the objections were repetitive. In almost every case, I ruled against Ms. Mark on the basis that evidence was relevant and, under the Statutory Powers Procedures Act, R.S.O. 1990, c. S.22, I was not bound by the strict rules of evidence and I had authority to admit hearsay evidence as long as it was relevant and not privileged. In each case, I stated that although I was admitting the evidence, I would consider the hearsay nature of the evidence when determining the weight to be given to the evidence.

Ms. Mark's counsel submits that he had done nothing more than pursue matters vigorously on her behalf. If objections were made by him to questions put to witnesses by counsel, he was only putting forth a position which he felt to be proper and appropriate under the circumstances. In respect of the challenge to the admissibility of documents which Dominion sought to file, he submits that he would have been remiss to simply concede the admissibility of the same. He submits that despite the fact that the Arbitrator has authority to accept hearsay evidence, some of this evidence, in his view, constituted double and triple hearsay, which, under the circumstances, could properly be the subject of an objection. He submits that the fact that the objections were not upheld cannot mean that the objections could be described as an unreasonable prolongation of the proceeding.

I accept that Ms. Mark's counsel has a duty to vigorously pursue his client's cause and safeguard her rights. However, I find his conduct in this case went beyond that. I do not believe that this duty extends to continuing to make unduly repetitive objections which the Arbitrator has already determined are inappropriate in the context of an arbitration proceeding. Continuing to make such objections, notwithstanding the Arbitrator's numerous rulings, not only prolonged but also hindered the proceeding.

Ms. Mark submits that "...the Arbitrator clearly must take into account that the insured was successful with a relatively significant matter, namely, her entitlement to interest which the insurer was disputing, to the very end." I have considered this. However, very little time was spent on this issue at the arbitration hearing. The great bulk of the time was spent on the other issues, particularly the spousal issue. Further, in determining that this is not an appropriate case for the exercise of my discretion to award expenses, I have also considered the fact that Dominion is not able to claim and recover its costs for economic loss resulting from the unreasonable conduct of Ms. Mark and her counsel.

Is Dominion entitled to its assessment fee?

Dominion seeks an award under subsection 282(11.2) of the Insurance Act which 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.

Dominion's claim for this award was raised for the first time in its written submissions on expenses. It was not identified as an issue prior to the arbitration hearing. Ordinarily, I would not allow this issue to be raised or added to the arbitration after the substantive issues in the case have been dealt with because of a concern that prejudice may be caused to the applicant. However, Ms. Mark did not object to this issue being raised at this late stage, and I will deal with it.

In Dinkha and Guardian Insurance Company of Canada,⁷ Arbitrator McMahon identified what he considered to be the purpose of subsection 282(11.2):

in my view, the section of the Act...(is) there to afford a measure of relief to insurers which are forced to respond (thereby incurring a filing fee) to applications that should never have been brought in the first place.

I agree with Arbitrator McMahon's comments.

In this case, I found Ms. Mark's claim that she was the only spouse of Mr. Kwan at the time of the accident and therefore entitled to the full amount of the death benefit to be of no merit. However, Ms. Mark's Application for Arbitration was not limited to this issue. It included the issue of her entitlement to interest which Dominion disputed at the arbitration hearing. The arbitration proceeding was at least necessary in respect of that issue and I found nothing improper in Ms. Mark's conduct on that issue. Dominion would have incurred a filing fee to respond to this issue in any event. Accordingly, Dominion is not entitled to an award under subsection 282(11.2) of the Insurance Act.

June 30, 1999

Shemin Manji Arbitrator

Date

Neutral Citation: 1999 ONFSCDRS 124 FSCO A96-000341

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