Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 247

Appeal Order P98-00018

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MOHADAI HARIPERSAUD

Appellant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Respondent

Before:

Nancy Makepeace, Director's Delegate

Counsel:

Jeffrey D. Puritt (for Ms. Haripersaud)

Harry J. Brown (for State Farm)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The arbitration order dated March 16, 1998 is rescinded and replaced with the following:
The issues in dispute between the parties were resolved by way of a Release dated April 28, 1995. State Farm is ordered to pay Ms. Haripersaud's treatment fee at the Metro Orthopaedic and Rehabilitation Centre in the amount of $1,260 in compliance with the settlement agreement.
Ms. Haripersaud's claims for interest on benefits owing and a special award are dismissed.
The arbitration order dated July 21, 1998 is confirmed.
State Farm shall pay Ms. Haripersaud's reasonable appeal expenses.

December 17, 1999

Nancy Makepeace

Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

On March 16, 1998, the arbitrator dismissed Ms. Haripersaud's claim for physiotherapy expenses of $1,260, plus interest and a special award. The parties were unable to agree as to the appropriate expenses order. On July 21, 1998, after a further hearing, the arbitrator ordered that each party would bear its own arbitration expenses, except that State Farm was ordered to pay Ms. Haripersaud's expenses in the amount of $1,000 in relation to State Farm's late production of certain audiotapes.

Ms. Haripersaud appeals both decisions. State Farm does not cross-appeal.

At the outset of the hearing, Mr. Brown conceded that State Farm had not paid the $1,000 expenses award, although it did not request a stay of the arbitrator's decision. Arbitration orders are binding on the parties. In the absence of a timely stay request, they are expected to be complied with forthwith.¹ Mr. Brown stated that the omission was his oversight and undertook to pay the amount forthwith.

Oral submissions were heard on November 12, 1999. At State Farm's request, the parties were invited to make further written submissions before December 8, 1999, but neither party did so.

II. THE ISSUE

Medical benefits, including physiotherapy, are provided under section 36 of the SABS-1994, the relevant part of which is as follows:

36(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for,

(b) chiropractic, psychological, occupational therapy and physiotherapy services;

State Farm relies on subsection 75(13) of the SABS-1994, which is as follows:

No payment is required for that portion of an expense referred to in Part VII [supplementary medical benefits, including physiotherapy] . . . that is reasonably available in respect of the insured person under any insurance plan or law or under any other plan or law.

State Farm submits that it is not required to pay for Ms. Haripersaud's physiotherapy treatment because it was "reasonably available" through OHIP.

III. BACKGROUND

Ms. Haripersaud was involved in a motor vehicle accident on March 31, 1995. She was seated in a parked car with her young daughter, waiting for her husband to return from buying groceries, when another car struck hers. Repairs to the car cost about $600. Photographs entered into evidence confirm the minor nature of the damage.

The day after the accident, Ms. Haripersaud saw her family doctor, Dr. Amirali Samji. He diagnosed lumbosacral strain, and referred her for physiotherapy at the St. Clair Dufferin Medical Centre ("St. Clair), a physiotherapy clinic located in the same building as Dr. Samji's office. When Ms. Haripersaud attended at the clinic, the receptionist registered her for physiotherapy at Metro Orthopaedic and Rehabilitation Centre ("Metro").

Evidence before the arbitrator established that St. Clair and Metro share the same premises, equipment, staff and ownership. However, St. Clair, an OHIP clinic, does not treat people injured in motor vehicle accidents, whereas Metro, a private clinic not licensed to bill OHIP, treats only those injured in automobile accidents. This arrangement is set out in a lease agreement between the two clinics (the "Shared Facilities Lease Agreement") dated December 1993. Ms. Haripersaud was treated through Metro because Dr. Samji wrote "MVA" [motor vehicle accident] on the prescription referral. Metro charged $60 per physiotherapy treatment, while St. Clair could only bill OHIP $12.20 per treatment. State Farm alleges that the arrangement between the two clinics is a profit-driven "billing scheme" designed to ensure that higher rates are charged to automobile insurers.

Metro began treating Ms. Haripersaud on April 5, 1995. On April 15, Ms. Haripersaud submitted a claim in the amount of $1,260 for physiotherapy at Metro. Metro's first invoice, for $540, was submitted directly to State Farm on April 15, but State Farm refused to pay on the basis that it had not yet received the appropriate forms. On April 4, State Farm had sent Ms. Haripersaud a Health Practitioner's Certificate for completion by her family doctor, but Dr. Samji did not complete it until April 19. Ms. Haripersaud completed an application for accident benefits form on April 12. Tajinder Singh, State Farm's Claim Representative, returned it as incomplete on April 27.

On April 28, 1995, Ms. Haripersaud and Ms. Singh met at the clinic. As a result of that meeting, Ms. Haripersaud signed a "Full and Final Release" of all her claims, and State Farm paid her $800. A handwritten addendum to the typed Release states that State Farm will pay for Ms. Haripersaud's "expenses related to the accident" up to April 29, 1995, but not beyond that date.

After the meeting, when Ms. Singh phoned the clinic to explain that State Farm would not pay Ms. Haripersaud's physiotherapy expenses after April 29, she was advised that the clinic was an OHIP clinic. On that basis, Ms. Singh advised Metro on May 11 that the file would be closed because Ms. Haripersaud could bill OHIP for her treatments.

Following a series of letters between Metro and State Farm, Ms. Haripersaud applied for mediation at the Commission. The Report of Mediator, dated November 20, 1995, indicates that the parties reached a procedural agreement: State Farm would contact the Ministry of Health to determine if Ms. Haripersaud's physiotherapy treatment was covered by OHIP, and would pay the expense, with interest, if OHIP coverage was not available. State Farm wrote to OHIP on December 6, requesting confirmation that St. Clair was an OHIP clinic. The letter does not mention Metro and states "there is no other physiotherapy clinic in this centre." OHIP responded on December 22, confirming that St. Clair is authorized to bill OHIP for physiotherapy services. Not surprisingly, OHIP's response makes no mention of Metro.

Ms. Haripersaud objects to the form of State Farm's enquiry. However, since there is no dispute that Metro is not authorized to bill OHIP, the leading nature of State Farm's enquiry to OHIP only serves to demonstrate that the dispute in this case quickly escalated beyond the issues raised in Ms. Haripersaud's claim for treatment fees of $1,260. In any event, State Farm relied on OHIP's response to refuse payment pursuant to the procedural agreement at mediation.

Ms. Haripersaud applied for arbitration in January 1996. The matter was heard over eight days between October 1996 and July 1997. In addition to Ms. Haripersaud, the arbitrator heard testimony from Dr. Samji, Ms. Kashmira Handy (the manager of Metro), Ms. Joanne Lui (the physiotherapist who treated Ms. Haripersaud at Metro), Ms. Ruth Cohen (State Farm's private investigator, who took several statements from Ms. Lui), and Ms. Singh. Twenty-three exhibits were filed, including two document briefs.

The arbitrator dealt, first, with a number of preliminary issues put forward by Ms. Haripersaud's counsel, including a number of bias allegations, which she dismissed. Most pertinent to the merits of the application and to this appeal was Mr. Puritt's argument that the matter was settled on April 28, 1995. The arbitrator agreed, and concluded that she therefore had no jurisdiction to hear Ms. Haripersaud's claim.² Although that was sufficient to dispose of the matter, the arbitrator went on the consider the main issues because "the parties devoted considerable time and effort" to them and "in the event that my decision is incorrect, they have some importance to this case and others."

The first of the main issues was whether Ms. Haripersaud or Metro was "the true" applicant. This was important because paragraph 281(1)(b) of the Act allows "the insured person" to commence an arbitration proceeding, but does not allow third parties, including treatment providers, to do so. There was some evidence to support State Farm's contention that Metro was the true applicant, but the arbitrator concluded that Ms. Haripersaud never assigned her right to commence an arbitration with respect to Metro's fees, and therefore she had standing to proceed.

The arbitrator also dismissed State Farm's argument that Ms. Haripersaud did not incur the expenses personally. She found that Ms. Haripersaud could be held liable for her treatment fees, and had incurred an expense within the meaning of section 36.

The final issue on the merits was whether the expense was reasonably available from OHIP and thereby excluded under subsection 75(13) of the SABS-1994. Mr. Puritt argued that the treatment Ms. Haripersaud needed was not reasonably available through OHIP. He submitted that "minor injuries can be adequately managed through the OHIP regime, but the more complex, multi-site injuries — which is what Ms. Haripersaud claims she sustained — require the multi-disciplinary approach offered by Metro. " The arbitrator rejected this argument as untenable:

although some car accidents result in serious, multi-site injuries, others produce minor injuries that respond well to a modest treatment plan; similarly, other types of accidents, be they work-related or domestic, may result in severe, multi-site injuries that require more comprehensive treatment. But the referral arrangement between Metro and [St. Clair] is inflexible, and does not allow for these realities. I agree with State Farm that the agreement between Metro and [St. Clair], based solely on incident rather than injury, and designed within a regime of comprehensive, private automobile insurance, suggests that treatment decisions are motivated more by financial profit than patient care.

The arbitrator next turned to the evidence about Ms. Haripersaud's treatment. This came mostly from Ms. Lui, who treated Ms. Haripersaud. Ms. Lui gave State Farm several written statements and testified at the arbitration hearing. The arbitrator considered the differences between the statements, and concluded that "there was little, if any, difference between the treatment [Ms. Haripersaud] received from Metro and what she would have received had she been referred through the OHIP regime." Finally, the arbitrator found that Ms. Haripersaud " sustained a relatively minor injury that could have been equally well managed within the OHIP regime." The arbitrator concluded that the treatment Ms. Haripersaud received from Metro was "reasonably available" through OHIP and therefore not available from State Farm. Since no benefits were payable, the arbitrator also denied the request for interest and a special award.

III. ANALYSIS

As Ms. Haripersaud's application for arbitration in this matter pre-dated the legislative changes on November 1, 1996, her appeal is not restricted to questions of law. However, it is well established that an appeal is not a hearing de novo or a reconsideration of the arbitration decision. In order to succeed in overturning the arbitrator's findings of fact, Ms. Haripersaud must show that the arbitrator

disregarded, misapprehended, or failed to appreciate relevant evidence, made a finding not reasonably supported by the evidence, or drew an unreasonable inference from the evidence.³

Ms. Haripersaud's appeal submissions address the effect of the settlement of April 28, 1995, the effect of the procedural agreement at mediation in November 1995, the bias allegations, and whether the expense was "reasonable available" through OHIP. Because of my finding with respect to the first issue, I need not decide the others.

Does the Release cover Metro's fee?

State Farm submits that the arbitrator erred in finding that the terms of the Release included Metro’s fee.

The handwritten addendum to the Release says: "State Farm will pay for my expenses related to the accident on 3/31/94 up to April 29, 1995. State Farm will not be responsible for any payment of expenses incurred after 4/29/95." (The parties agree that the reference to an accident date in 1994 was a clerical error.) State Farm submits that the addendum is implicitly qualified by a requirement that the expenses be incurred by Ms. Haripersaud personally and not be reasonably available through OHIP. The arbitrator rejected this argument. She found that:

the broad wording in the Release compels State Farm to pay for the physiotherapy services that Metro provided, regardless of whether they were "incurred" or were "reasonably available from OHIP" within the technical meaning of sections 36 and 75(13), respectively.⁴

I agree. It was, of course, open to State Farm to include a clause in the settlement agreement stating, "State Farm will pay only those expenses that were incurred personally by Ms. Haripersaud and that were not reasonably available through OHIP," or "State Farm will pay only those expenses to which Ms. Haripersaud is entitled under section 36(1) and subsection 75 (13) of the SABS-1994." No such qualification is found in the terms of the Release. It is questionable whether Ms. Haripersaud would have signed a Release qualified in that way because it would be virtually unenforceable. Nor would such a Release allow State Farm to close its file, since it would invite further dispute about what expenses were payable.

A negotiated settlement involves compromise on both sides. Each party gives up something in order to resolve the dispute without the costs and risks of litigation. In this case, Ms. Haripersaud gave up her right to claim any further physiotherapy expenses she might need after April 29, 1995. This may have been a significant compromise for her, since the Release was signed less than a month after the accident. What State Farm gave up was the right to dispute Ms. Haripersaud's entitlement to expenses up to April 29, 1995. That included Metro's bill for $1,260 for services between April 5 and April 28, 1995.

Enforcement of the Settlement Agreement

The more difficult issue is whether the arbitrator had jurisdiction to enforce the settlement agreement. The arbitrator held that she had no further jurisdiction once she concluded that a valid settlement resolved the claim before her. She dismissed Ms. Haripersaud's claim on that basis.

The arbitrator's task was complicated by the way this issue was put forward by Ms. Haripersaud. Rather than claiming entitlement to medical expenses based on the settlement agreement, Ms. Haripersaud claimed that she had set aside the agreement in response to State Farm's fundamental breach of it. She submitted that as the agreement was set aside, she was entitled to claim these expenses by way of arbitration. She explained that she had no other choice because the "no litigation" clause in the Release precluded her from seeking enforcement through arbitration. To further complicate matters, she claimed the Metro fees as damages for State Farm's breach of contract.

The arbitrator agreed that State Farm had fundamentally breached the contract, but was not satisfied that Ms. Haripersaud had set aside the agreement:

The onus is on the "innocent party" to communicate to the "repudiating party" that she intends to "accept" the repudiation — i.e. treat the contract as "ended." Ms. Haripersaud argues that by filing for mediation and arbitration she has implicitly treated the Release as over. I disagree. Although the communication need not be by words if it can be reasonably inferred from the circumstances, in this case Ms. Haripersaud's conduct suggests she had no intention of setting aside the contract. She has kept the settlement funds. Neither she nor her counsel did anything, before this hearing began, to convey to State Farm that she accepted its repudiation. At no point in her testimony did Ms Haripersaud indicate that once State Farm breached the agreement, she intended to treat it as over. State Farm insists, with justification, that it had no idea Ms. Haripersaud wished to set aside the agreement until her counsel raised the issue at the hearing.

The arbitrator found that even if Ms. Haripersaud had set aside the agreement, her claim for Metro's account is not a claim for damages flowing from the breach of the agreement. Moreover, the Commission does not have jurisdiction to award damages for breach of contract. I find no error in this analysis, which is correct in law.

Arbitrators are creatures of statute, with no general or residual jurisdiction. An arbitrator's jurisdiction derives from sections 279, 280 and 281 of the Act. The key provision is subsection 279(1), which is as follows:

Disputes in respect of any insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled shall be resolved in accordance with section 280 to 283 and the Statutory Accident Benefits Schedule.

Subsection 280(1) provides that an insured person or an insurer may refer any benefit dispute to a mediator. Pursuant to subsections 281(1) and (2), an insured person may refer any issue in dispute to an arbitrator, but only if mediation was sought and failed.

Subsection 279(2) states:

Any restriction on a party's right to mediate, litigate, arbitrate, appeal or apply to vary an order as provided in sections 280 to 284 is void except as provided in the regulations.

The Regulation referred to in s. 279(2) is the Settlement Regulation, which imposes notice obligations on the insurer and provides a two-day cooling off period after the settlement is signed.⁵ Subsection 279(2) and 281(2) are the only provisions in the Act that speak to the effect of a settlement agreement on an arbitrator's jurisdiction.

Arbitrators have frequently been asked to determine whether a settlement agreement governs the issues in dispute and therefore precludes the matter from proceeding to arbitration. Even more common, especially before the introduction of the Settlement Regulation, have been requests by an insured person to set aside a settlement agreement on the ground that it was unconscionable or obtained through duress, undue influence, or misrepresentation. Arbitrator Mackintosh explained the basis for setting aside these agreements in an early decision, Bailey and CAA Insurance Company (Ontario)(No.2):

The Applicant’s ability to access the arbitration system and to receive the benefits claimed depends on a determination about whether a binding settlement exists. The dispute resolution scheme of the Insurance Act specifically contemplates that disputes in respect of any insured person’s entitlement to no-fault benefits shall be resolved in accordance with its provisions. The provisions noted above implicitly grant an arbitrator, appointed under the Insurance Act, the jurisdiction to determine whether there was a binding settlement of the issues between the parties and by extension, to determine whether mediation succeeded or failed.⁶

This analysis was reaffirmed in Abdulbaki and Royal Insurance Company of Canada⁷ It was rarely challenged until Branchaud and Co-operators General Insurance Company.⁸ In that decision, the arbitrator accepted that he had jurisdiction to apply common-law rules to determine whether there was a valid contract in place and to determine its scope, but held that he had no jurisdiction to set aside an otherwise valid settlement because this was an equitable remedy and he, as a creature of statute, had no jurisdiction in equity.

On appeal, Director's Delegate Naylor found that the arbitrator "took too restricted an approach to jurisdiction." She held that "the key question in determining the parameters of an arbitrator's jurisdiction is to look at the task or tasks required of an arbitrator under the legislation." The task, as set out in subsection 219(1), is to resolve all disputes in respect of an insured person's entitlement to accident benefits, or the amount of benefits to which she is entitled. The breadth of an arbitrator's jurisdiction is confirmed in section 20 and subsection 282(3) of the Act:

20(1) This section applies to proceedings under this Act before the commissioner, superintendent and the Director and before an arbitrator.

(2) A person referred to in subsection (1) has exclusive jurisdiction to exercise the powers conferred upon him or her under this act and to determine all questions of fact or law that arise in any proceeding before him or her and, unless an appeal is provided under this Act, his or her decision thereon is final and conclusive for all purposes. [italics added]

282(3) The arbitrator shall determine all the issues in dispute, whether the issues are raised by the insured person or the insurer.

Director's Delegate Naylor also considered the cost and delay of multiple proceedings and the broader regulatory framework of which the arbitration process is a part:

Section 288 provides a direct link between the regulation of unfair or deceptive business practices and arbitration.⁹ In my view, this reinforces the arbitrator's jurisdiction to review settlements between insurance companies and consumers and to intervene in the event of misleading or unfair conduct. Tying the arbitrator's hands in respect of a settlement which a court would consider inequitable to enforce does not make sense in the overall statutory context.

The Director's Delegate concluded that "the language and objectives of the Act support the proposition that a Commission arbitrator has implicit power to apply equitable principles in the ordinary exercise of his or her statutory jurisdiction." Her comments on remedy are particularly pertinent to this case:

An arbitrator, of course, cannot grant a remedy outside the parameters of his or her statutory authority. He or she has no jurisdiction, for example, to order specific performance or issue a declaration confirming or setting aside a contract. If that is what the parties want, they must pursue their remedy in court. Given the courts' more expansive jurisdiction, one might expect to see an application to the court to stay an arbitration proceeding, pending judicial disposition of the matter. However, both Mr. Branchaud and Co-operators want the arbitrator to deal with the entirety of their dispute and are seeking an order regarding Mr. Branchaud's entitlement to benefits.

I agree with these comments. In Branchaud, it was the insured person who sought to have the settlement agreement set aside in order that he could put his benefit claim before an arbitrator. In this case, the insured person seeks to enforce the settlement agreement; it is the insurer who argues that it does not govern the benefits claimed. In this novel situation, Ms. Haripersaud's counsel chose to characterize the remedy sought as damages or specific performance. If that is correct, I agree with the arbitrator that she had no jurisdiction to proceed. However, on reflection, I do not accept his characterization of the appropriate remedy.

The law has been clarified by a recent decision of the Divisional Court, which the arbitrator did not have the advantage of reading.¹⁰ The insured person, Michael Wood, was injured in a motor vehicle accident in December 1994. He and the insurer, Guardian Insurance Company, settled their dispute about statutory accident benefits in July 1996. He subsequently attempted to rescind the agreement on the ground that Guardian had not complied with the requirements of the Settlement Regulation. He applied to the Commission for mediation of the dispute. The Commission refused to accept the application based on the settlement agreement, which by its terms precluded the insured person from commencing mediation, arbitration or other proceedings.

On judicial review, the Divisional Court found that the Commission erred in law in declining jurisdiction. After reviewing the Commission’s role and jurisdiction, the Court noted that after the introduction of the Settlement Regulation on January 1, 1994, the Commission developed a policy not to accept applications for mediation where there are issues about the validity of a settlement. The Commission's position was that the validity of the settlement agreement was a matter of contract and must be determined by a court of competent jurisdiction. The Court's reasoning is as follows:

The fact is that a dispute exists concerning matters relevant to whether Guardian has complied with the Settlement Regulation. If there has been compliance, Wood is not entitled to require the Mediation Unit to mediate his claims for SABs and he may very well be stymied from taking any further proceedings by reason of the limitation is ss. 281(2). If there has not been compliance, Wood is entitled to rescind the settlement, as he has purported to do, and apply for the appointment of a mediator, as he has done. At the conclusion of the mediation the limitation in ss. 281(2) would not be applicable.

Clearly the issue of whether Guardian has complied with the requirements of the Settlement Regulation has everything to do with Wood’s entitlement to SABs and as such falls within the plain common sense meaning of the words "any issue in dispute in respect of the insured person’s entitlement to statutory accident benefits" in ss. 280(1). [emphasis in original]

This analysis reaffirms the approach taken by Arbitrator Mackintosh in Bailey and Director's Delegate Naylor in Branchaud. The key point is that arbitrators "have the powers that are conferred on them either expressly by the legislation or by necessary implication."¹¹ I agree with Director's Delegate Naylor that the plain wording of subsection 282(3) "confers jurisdiction on an arbitrator to deal with those questions which must be answered in order to make a ruling on an applicant's entitlement to benefits." In this case, Ms. Haripersaud claimed supplementary medical benefits in relation to her treatment at Metro. Had there been no settlement on April 28, 1995, she would have been entitled to commence mediation and arbitration with respect to these benefits. She is still seeking those benefits because State Farm has not paid them. The question is whether the settlement stands in her way despite the fact that State Farm has not performed its side of the bargain. I see no reason why it should. I find that the question whether the settlement agreement governed the benefits claimed was a question the arbitrator had to answer in order to make a ruling on Ms. Haripersaud's entitlement to benefits. Accordingly, based on the plain meaning of subsection 282(3), the arbitrator had jurisdiction to determine this issue.

Having found that the settlement agreement included Metro's fees, I find that the arbitrator had jurisdiction to order State Farm to pay those fees pursuant to subsection 279(4) of the Act, which is as follows:

The Director and every arbitrator appointed by the Director shall determine issues before them by order and may make an order subject to such conditions as are set out in the order.

Accordingly, the remedy requested was within the arbitrator's jurisdiction.

Although I find that the s. 282(3) and s. 279(4) plainly apply in this case, I find that any ambiguity in the Act on this point should be resolved in favour of granting the order requested for the same policy reasons considered by Director's Delegate Naylor in Branchaud. The Commission has regulatory as well as adjudicative powers. Subsection 282(10) and section 288 of the Act reflect the legislature's intent that arbitrators bear in mind issues of insurer conduct. Non-performance of a settlement agreement clearly raises such issues. Moreover, where mediation fails, subsection 281(1) gives the insured person the unfettered right to choose whether to proceed through arbitration or the courts. I can think of no policy reason consistent with the purposes of the Act for permitting an insurer, through non-performance of a settlement agreement, to force an insured person into the courts despite her wish to proceed through arbitration.

I find that the arbitrator erred in declining to order State Farm to pay the benefits it agreed to pay on April 28, 1995. The appropriate order will be made.

IV. EXPENSES

Because Ms. Haripersaud’s application for arbitration was submitted before November 1, 1996, she is not affected by the amendments that took effect that day allowing Commission adjudicators to award expenses to the insured person or the insurer. Therefore the only issue before the arbitrator was whether she should order State Farm to pay Ms. Haripersaud’s expenses. As the arbitrator explained, subsection 282(11) of the Act gives Commission adjudicators discretion to award expenses subject to the rules set out in the expenses regulation. Arbitrators have generally awarded unsuccessful applicants their reasonable arbitration expenses. However, expenses have been denied where the claim is found to be fraudulent, frivolous or completely lacking in merit, or where the applicant’s conduct impeded or unreasonably prolonged the proceeding.

In a strong decision, the arbitrator declined to award Ms. Haripersaud her arbitration expenses because she found Ms. Haripersaud’s claim to be "misguided" and unmeritorious. She was particularly critical of the argument, raised for the first time in Mr. Puritt's opening submissions, that she had repudiated the April 28, 1995 settlement. Several days of hearing were required to deal with this improperly framed submission. The arbitrator was also critical of Ms. Haripersaud's bias allegations, which she said were "brought without notice and utterly lacking in merit, . . . wasteful of resources and disrespectful of the tribunal." Finally, the arbitrator commented on the problem at the heart of Ms. Haripersaud's claim:

Although [Ms. Haripersaud] got around the technical issues regarding standing raised in Adusei and other decisions, she failed to persuade me that Metro’s operation was anything other than a profit driven scheme designed to take advantage of the provisions of the Schedule. Her injury was minor and required modest treatment equally available from an OHIP facility. Nor was this a minor issue; State Farm raised it at the pre-hearing and both parties submitted considerable evidence and arguments on it at the arbitration. My decision on this issue was obiter only because the question of the Release arose shortly before the hearing as a preliminary issue.

Accordingly, the arbitrator declined to order expenses payable to Ms. Haripersaud, except for expenses relating to State Farm's late production of an audiotaped conversation between its adjuster and Ms. Haripersaud, which the arbitrator fixed at $1,000. The arbitrator declined to order an assessment against Ms. Haripersaud under subsection 282(11.2) of the Act only because of certain concerns about State Farm's conduct.

Director's Delegate Naylor set out the standard of review of expenses decisions in Allison and Markel Insurance Company.¹²

An award of expenses is a matter within the discretion of the arbitrator, although the discretion must be exercised reasonably. Because the discretion is given to the arbitrator, it should not be interfered with lightly on appeal. The arbitrator is able to consider the evidence in totality, including observing and hearing any witnesses, and usually is in the best position to assess the merits of the case and the way it was handled by the parties.

An applicant who successfully appeals an unfavourable arbitration decision can normally expect that the arbitrator's adverse expenses ruling will also be overturned. However, this is an extraordinary case, where both parties took a very adversarial approach over a nominal amount of money because the real dispute concerned a broader systemic issue. Keeping in mind the appropriate deference due to an arbitrator's assessment of the parties' conduct, I find no error in the arbitrator's finding that the parties should bear their own arbitration expenses.

The parties' submissions were largely unchanged on appeal. However, as the appellant succeeded, she is entitled to her reasonable appeal expenses.