Neutral Citation: 2000 ONFSCDRS 146
FSCO A98-000030
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
FADUMO HASSAN, SHUKRI OMAR
Applicants
and
CIBC INSURANCE
Insurer
REASONS FOR DECISION
Before:
Janice Mackintosh
Heard:
July 19, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Frank Sabetti, seeking to withdraw as counsel of record for the Applicants;
William M. Sproull, barrister and solicitor for CIBC Insurance;
Neither Fadumo Hassan nor Shukri Omar attended at the hearing.
Issues:
The Applicants, Fadumo Hassan and Shukri Omar, each claimed to have been injured in an automobile accident on July 3, 1997 while passengers in a vehicle insured by CIBC Insurance ("CIBC"). They each sought benefits from CIBC pursuant to the Schedule.1 CIBC refused to pay any benefits to either Applicant on the basis that they were not involved in an "accident" and were not "insured person[s]," as defined in Part I, subsection 2(1) of the Schedule. The Insurer also alleged that the Applicants wilfully misrepresented material facts in connection with their respective Applications for Accident Benefits and were not entitled to benefits as per section 48 of the Schedule.
In the further alternative, the Insurer submitted that the Applicants failed to establish they suffered an impairment reasonably requiring medical treatment or that the disability claimed was caused or contributed to by the alleged motor vehicle accident on July 3, 1997.
The Applicants were unable to resolve their disputes through mediation and they each 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:
Is Ms. Hassan entitled to receive a weekly income replacement benefit pursuant to section 4 of the Schedule?
Is Ms. Hassan entitled to receive a medical benefit for physiotherapy treatment pursuant to section 14 of the Schedule?
Is Ms. Omar entitled to receive weekly caregiver benefits pursuant to section 13 of the Schedule?
Is Ms. Omar entitled to receive a medical benefit for physiotherapy and medical services pursuant to section 14 of the Schedule?
Are Ms. Hassan and/or Ms. Omar entitled to receive interest on any amounts owing?
Are Ms. Hassan and/or Ms. Omar entitled to recover their expenses of the arbitration?
Are Ms. Hassan and/or Ms. Omar entitled to a special award against CIBC?
Is CIBC entitled to recover its expenses of the arbitration?
Is CIBC entitled to recover its assessment fee?
Result:
Ms. Fadumo Hassan's claims for benefits are dismissed.
Ms. Shukri Omar's claims for benefits are dismissed.
Ms. Hassan and Ms. Omar are denied their expenses of the arbitration.
CIBC Insurance is entitled to recover its expenses of the arbitration in the amount of $6,234.42 for legal fees and $683.02 for disbursements from Fadumo Hassan and Shukri Omar either jointly or severally.
CIBC Insurance is entitled to recover its $3,000 assessment fee from Fadumo Hassan and Shukri Omar either jointly or severally.
EVIDENCE AND ANALYSIS:
The Applicants each filed an Application for Arbitration on January 6, 1998 [incorrectly date stamped January 6, 1997]. The Insurer's Responses were each filed February 13, 1998. A joint pre-hearing in this matter was scheduled for June 1, 1998 before Arbitrator Leitch.
In anticipation of the joint pre-hearing, counsel for the Insurer provided Applicants' counsel, Mr. Frank Sabetti, with a list of relevant documents in the Insurer's possession and also requested medical records, employment records and income tax returns in respect of both Applicants, by letter dated March 24, 1998.
The two Applicants appeared at the joint pre-hearing on June 1, 1998 with their counsel. The pre-hearing letters, each dated June 4, 1998, note that the parties had an opportunity to review and exchange production of documents amongst themselves. The hearing in this matter was scheduled for July 19, 20, 21 and 22, 1999.
By letter dated October 22, 1998, Insurer's counsel reminded Applicants' counsel that the Insurer had not yet received any of the Applicants' documentation, originally requested by letter dated March 24, 1998. Counsel for the Insurer sent several follow-up letters to the Applicants requesting production, including May 20, 1998, October 22, 1998 and again on January 8, 1999. On March 5, 1999, the Insurer requested a resumption of the pre-hearing to deal with outstanding production issues. By order dated May 3, 1999 Arbitrator Leitch required the Applicants to produce all items listed in a schedule attached to his order by June 3, 1999, for use at the hearing scheduled to begin on July 19, 1999.
The Applicants failed to produce the documents in accordance with Arbitrator Leitch's production order of May 3, 1999. The Applicants failed to promptly notify the Insurer of their unavailability to attend insurer's medical examinations arranged for May 10, 1999, thereby wasting the time of the medical experts involved and causing unnecessary expense to the Insurer. The Applicants did not appear at the hearing, although duly served with notice of the time and place of the hearing. It was necessary for Applicants' counsel, Mr. Sabetti, to make a formal request at the hearing held on July 19, 1999, to be removed from the record as their representative. Mr. Sabetti indicated that his numerous letters and telephone messages to the Applicants had gone unanswered and that he was unable to communicate with them or to obtain their instructions. He stated that his best information (obtained from a former room-mate of the Applicants) was that the Applicants were out of the country, had been out of the country for some time and had no intention of returning to Toronto for the hearing. I granted Mr. Sabetti's request to be removed from the record and he left the hearing.
Applicants' Claims:
No evidence was filed or given on behalf of the Applicants, therefore I dismissed their claims on the basis of their failure to prove any entitlement to the benefits they claimed under the Schedule. I also denied the Applicants' claim for expenses of the hearing on the basis of their demonstrated disregard for and disrespect of the arbitration process.
Insurer's Expenses:
The Insurer sought its expenses of the arbitration under subsection 282(11) and sections 73.1 and 73.2 of the Dispute Resolution Practice Code (3rd Ed., April 15, 1997). The Insurer's expenses are granted against Ms. Hassan and Ms. Omar jointly or severally in the total amount of $6,917.44 on the basis of an extract from the time Summary and Client Expense Journal of the law firm of Zarek, Taylor, Grossman, Hanrahan, marked as Exhibit 1, and the accompanying explanation provided by Mr. Sproull at the hearing. I find that the expenses claimed were reasonable, justified and in keeping with the requirements of the Expenses Schedule. I find that the Insurer and its lawyers were put to time and expense as a result of the Applicants' continuing failure to respond to production requests, necessitating follow-up correspondence, a motion and additional attendances of counsel. Furthermore, the unnecessary expenditure of time and expense was heightened by the Applicants' failure to keep their own counsel informed of their intentions with respect to their claims, thus prolonging the process over a longer period than if the Applicants had simply withdrawn their claims.
Assessment against Applicants:
The Insurer also requested that an assessment be made against the Applicants in the amount of $3,000, or $1,500 each, pursuant to subsection 282(11.2) of the Insurance Act as amended, on the basis that the Applicants commenced an arbitration that was frivolous, vexatious or an abuse of process. I have no hesitation in concluding that this arbitration was an abuse of process. It appears that the Applicants formulated an intention to abandon their claims at an early stage in this proceeding. After their initial appearance at the pre-hearing discussion they provided little in the way of evidence or support for their claims. They ignored a production order of the pre-hearing arbitrator and wasted the Commission's time and resources, the Insurer's time and resources, as well the time of the Insurer's medical experts. The Applicants' disinterest in their own claims was such that they did not bother to maintain contact with their counsel. This profound disinterest, coupled with the evidence filed by the Insurer in Exhibits 2 through 12 and the oral and written submissions of counsel for the Insurer, casts considerable doubt upon the authenticity of the original accident and injuries claimed.
The Insurer established significant inconsistencies in the three separate statements given by the driver of the vehicle and each Applicant (passengers), concerning the extent of the impact, the damage to the vehicles, and the aftermath of the accident (Exhibits 4, 6 and 7). Further, the Insurer submits that the third-party driver of the other vehicle allegedly involved in the accident, has categorically denied that he was involved in an accident or that there was any damage to his rented vehicle (Exhibit 10). This is also consistent with the records of the car rental company (Exhibit 8), which show no evidence of damage to the car, in sharp contrast to the description of the accident given in the Applicants' statements. In the absence of any explanation or rebuttal of the Insurer's evidence by the Applicants, I accept the Insurer's position that the benefits claims of the Applicants were commenced without basis and order the Applicants to pay a $3,000 assessment to the Insurer, either jointly or severally.
August 4, 2000
Janice Mackintosh
Arbitrator
Date
Neutral Citation: 2000 ONFSCDRS 146
FSCO A98-000030
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
FADUMO HASSAN and SHUKRI OMAR
Applicant
and
CIBC INSURANCE
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mr. Frank A. Sabetti is removed as solicitor of record for Ms. Fadumo Hassan and Ms. Shukri Omar.
Ms. Fadumo Hassan's claims for benefits are dismissed.
Ms. Shukri Omar’s claims for benefits are dismissed.
Ms. Hassan and Ms. Omar are denied their expenses of the arbitration.
CIBC Insurance is entitled to recover its expenses of the arbitration in the amount of $6,234.42 for legal fees and $683.02 for disbursements from Fadumo Hassan and Shukri Omar either jointly or severally.
CIBC Insurance is entitled to recover its $3000 assessment fee from Fadumo Hassan and Shukri Omar either jointly or severally.
June 21, 2000
Janice Mackintosh
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.