Neutral Citation: 1999 ONFSCDRS 193

FSCO A97-002052

BETWEEN:

ANTONIO DA SILVA

Applicant

and

KINGSWAY GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Deena Baltman

Heard: September 13, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Rebecca Neilson for Mr. Da Silva

Elizabeth Iwata for Kingsway General Insurance Company

Issues:

The Applicant, Antonio Da Silva, was injured in an automobile accident on June 19, 1995. He continued to work after the accident until May 16, 1997. He then applied for various benefits from Kingsway General Insurance Company ("Kingsway"), payable under the Schedule.¹ Kingsway refused to pay any benefits. The parties were unable to resolve their disputes through mediation, and Mr. Da Silva applied for arbitration at the Financial Services Commission of Ontario (the Commission).

Mr. Da Silva did not attend the hearing, nor did he offer any explanation for his absence. At the beginning of the hearing, I granted a motion by Ms. Nelson, Mr. Da Silva's counsel, to be removed from the record. After satisfying myself that Mr. Da Silva had adequate notice of the motion and its possible consequences, I proceeded with the hearing.

The issues in this hearing are:

Is Mr. Da Silva entitled to receive a weekly income benefit from May 17, 1997 onward?
Is Mr. Da Silva entitled to recover the cost of chiropractic care in the sum of $3,733.25?
Is Mr. Da Silva entitled to recover the cost of various rehabilitation benefits?
Is Mr. Da Silva entitled to his expenses of the arbitration?
Is Kingsway entitled to its expenses of the arbitration?

Result:

Mr. Da Silva is not entitled to a weekly income benefit for any period beyond May 17, 1997.
Mr. Da Silva is not entitled to recover the cost of chiropractic or rehabilitation benefits.
Mr. Da Silva is not entitled to recover his expenses of the arbitration. Kingsway is entitled to its assessment fee of $3,000, plus assessable disbursements as itemized herein.

EVIDENCE AND ANALYSIS:

1. Motion by Ms. Nelson to be removed from the record:

A few weeks before this hearing, Ms. Nelson brought a motion to have her firm removed from the record. The background is as follows.

The pre-hearing occurred on May 14, 1998, at the Commission. Mr. Da Silva attended and was represented by Mr. Azevedo. The parties agreed to hearing dates of July 19 to 22, 1999. A pre-hearing letter and a Notice of Hearing confirming the hearing dates were mailed to Mr. Da Silva at his Toronto address. The letters were never returned and there was no indication that he did not receive them. The Notice of Hearing cautions the Applicant that "if you or your representative do not attend at the hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of the arbitration proceedings."

By letter dated July 16, 1999, Ms. Nelson requested an adjournment of the arbitration on the ground that Mr. Da Silva had injured himself in Portugal and could not return to Canada. A rather vague and largely illegible letter was produced from a medical doctor in Portugal to this effect. Although the letter indicated that Mr. Da Silva knew or ought to have known by July 2, 1999 that he would be unable to attend the hearing, he waited until July 15 to so advise his counsel. He had also neglected to provide her with necessary medical information.

After hearing submissions, the hearing arbitrator adjourned the arbitration to September 13, 1999, peremptory on the insured. He also attached various conditions and made orders regarding production, none of which the Applicant has complied with.

Since the adjournment, Ms. Nelson has made numerous attempts to obtain instructions and information from Mr. Da Silva, to no avail. Letters sent to Portugal have been returned. However, letters sent to the Toronto address have been opened and read by his daughter, who advised Ms. Nelson that she has communicated their contents with her father by telephone. Ms. Nelson's office left numerous telephone messages on Mr. Da Silva's telephone answering machine in Portugal, none of which was returned.

On August 3 and 13, 1999, Ms. Nelson wrote to Mr. Da Silva advising that if he did not respond by August 20, she would bring a motion to remove her firm as his solicitors. On Friday, August 20, Ms. Nelson spoke with Mr. Da Silva's daughter who confirmed that she had received the letter of August 13 and communicated its contents to her father. Ms. Nelson asked her to tell Mr. Da Silva to telephone her the following Monday if he wished to proceed with the case. As she did not hear from Mr. Da Silva, Ms. Nelson proceeded with her motion, and served it upon Mr. Da Silva at his Toronto address.

It appears that the motion was brought to Mr. Da Silva's attention by his daughter, because by fax dated September 9, Mr. Da Silva advised Ms. Nelson that he wished her to continue as his solicitor. He provided Ms. Nelson with a number at which he could be reached in Portugal and other instructions which she found to be "very vague." When she telephoned Mr. Da Silva, he advised that he was not able to speak to her at that time, and wished to call her later. She told him that she intended to proceed with her motion on September 13, and that if he wished to oppose the motion he should arrange for a representative to attend. She also advised him that if he or a representative did not appear at the hearing, he "would lose" the case. Mr. Da Silva did not attempt to contact Ms. Nelson again.

Given these facts, I find that Mr. Da Silva had adequate notice that his counsel intended to remove herself from the record. I also find adequate grounds for such a removal; Mr. Da Silva failed to respond to numerous requests for information and did not instruct his solicitors in an adequate or timely manner. I therefore granted Ms. Nelson's motion.

2. Insurer's request to proceed with the hearing:

Although Kingsway did not oppose Ms. Nelson's motion to get off the record, it strenuously objected to any further adjournments. I agree that in this case no further adjournment is warranted. Mr. Da Silva has known since the pre-hearing of the Commission's practice to proceed with the hearing where the applicant or his representative does not appear. He was aware that the adjournment granted in July was peremptory and was notified of the new hearing date. He also knew that his counsel was seeking to get off the record and was warned that if he did not attend his case might be dismissed. Section 7 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended provides that where a party has been notified of a hearing and fails to attend, "the tribunal may proceed in the absence of the party and the party is not entitled to any further notice in the proceeding."

Given all these factors, I determined that it was appropriate to proceed with the hearing.

3. Applicant's claim for accident benefits:

As Mr. Da Silva bears the onus of proof in the recovery of accident benefits, and he failed to present any evidence at the hearing, I dismissed his claim for accident benefits.

4. Insurer's claim for an assessment and disbursements:

The Insurer seeks payment by Mr. Da Silva of $3,000, being the amount of its filing fee, plus various disbursements. Section 282 (11.2) of the Insurance Act provides for an assessment fee:

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.

[emphasis added]

I find that Mr. Da Silva abused the Commission's process. He obtained an adjournment of the original hearing date on tenuous grounds and at the last moment. He failed to provide necessary medical information to his lawyer and disregarded production orders made by the hearing arbitrator. He then failed to respond to numerous letters and phone calls from his counsel and the Commission, and ignored messages left with his daughter requiring his urgent attention. When his lawyer brought a motion to get off the record, he waited until the last moment to respond, and even then provided inadequate instructions. He failed to attend at the hearing or have a representative there on his behalf. All of this caused the Commission and the Insurer to expend needless time and money preparing for a hearing which Mr. Da Silva was obviously not taking seriously. I find that this conduct amounts to an abuse of process and warrants payment of the Insurer's assessment fee of $3,000.

I have not found that Mr. Da Silva's application was in itself abusive, but rather relied on his subsequent conduct to find that he abused the Commission's process. Previous case law at the Commission suggests that section 282 (11.2) applies only to cases where the impugned conduct was present when the application was begun. In Richard and Lombard General Insurance Company of Canada,² Arbitrator McMahon stated that the insertion of the word "commences" directs the inquiry "on the state of affairs as they existed at the time the action was launched, and not on later procedural steps." He found that misconduct that occurred after the application was begun was "insufficient to trigger the section, unless it is part of a larger course of improper conduct tied to the commencement of the arbitration." Arbitrator McMahon's views were adopted in subsequent cases.³

However, since then Director's Delegate Draper found that the section should not be construed so narrowly. In Gawronski and Allstate Insurance Company of Canada,⁴ he suggested that it can embrace abusive behaviour which occurred after the arbitration was begun. Delegate Draper's approach was later applied by Arbitrator Alves in Cassman and Wawanesa Mutual Insurance Company.⁵ Their conclusion is consistent with the reference in section 282(11.2) to "an arbitration," a process that includes many steps beyond the filing of an application. Had the drafters intended to confine the section to cases where the applicant filed an abusive application, they could have said so.

Kingsway also requested payment of various disbursements. Several of these involve costs incurred by Kingsway in conducting medical examinations (Dr. Snow, Riverfront Medical Evaluations, T.T.H. Rehabilitation Solutions) or obtaining clinical records (Drs. Sehmi, Picard, Sandor, etc.). Despite Kingsway's submission that it intended to rely upon these assessments or records at arbitration, it incurred them while adjusting the file and therefore cannot recover them as an arbitration expense. Similarly, the interpreter expense arose from attendance at the medical examinations requested by Kingsway, and is therefore not recoverable.

I do, however, allow the expenses incurred in the preparation of Dr. Lipson and Dr. Rosenbluth for testimony at the aborted arbitration hearing in July, being $428 and $450, respectively, for a total of $878. These expenses are not related to Kingsway's adjustment of the file but to its preparation for arbitration.

October 5, 1999

Deena Baltman

Arbitrator

Date