Neutral Citation: 2000 ONFSCDRS 15

FSCO A98-001034

BETWEEN:

ABDUL REZA TAHERI-YEILAGH

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Judith Killoran

Heard:

November 1, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Mr. Taheri-Yeilagh did not appear and no one appeared on his behalf.

Donald G. Cormack for Wawanesa Mutual Insurance Company

The Applicant, Abdul Reza Taheri-Yeilagh, was injured in a motor vehicle accident on October 11, 1997. He applied for and received statutory accident benefits from Wawanesa Mutual Insurance Company ("Wawanesa"), payable under the Schedule.¹ Wawanesa terminated weekly income replacement benefits on January 11, 1998. The parties were unable to resolve their disputes through mediation, and Mr. Taheri-Yeilagh applied for arbitration at the Financial Services Commission of Ontario (the "Commission") under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mr. Taheri-Yeilagh entitled to receive weekly income replacement benefits from January 11, 1998 to mid-June, 1998 pursuant to section 4 of the Schedule?
Is Wawanesa entitled to the repayment of benefits already paid to Mr. Taheri-Yeilagh pursuant to sections 47 and 48 of the Schedule?
Is Mr. Taheri-Yeilagh liable to pay an award to Wawanesa under subsection 282(11.2) of the Insurance Act, R.S.O. 1990, c.I.8 on the grounds that he commenced an arbitration that is frivolous, vexatious or an abuse of process?
Is Wawanesa liable to pay Mr. Taheri-Yeilagh's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?
Is Mr. Taheri-Yeilagh liable to pay Wawanesa's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

Wawanesa is not obliged to pay further income replacement benefits to Mr. Taheri-Yeilagh.
Wawanesa is not entitled to the repayment of benefits already paid.
Wawanesa is not entitled to an award pursuant to subsection 282(11.2) of the Insurance Act.
Wawanesa is not obliged to pay Mr. Taheri-Yeilagh's expenses under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8.
Mr. Taheri-Yeilagh is obliged to pay Wawanesa's expenses under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8. The expenses are fixed at $2,216.89.

Neither Mr. Taheri-Yeilagh nor a representative attended the hearing to speak to the issues in dispute.

The arbitration hearing began, as scheduled, on November 1, 1999 at 10:00 a.m. The hearing was delayed for one half-hour to wait for Mr. Taheri-Yeilagh to appear. Mr. Taheri-Yeilagh did not appear and no one appeared on his behalf. Mr. Cormack appeared on behalf of Wawanesa.

On November 10, 1998, a Notice of Hearing was forwarded to Mr. Taheri-Yeilagh informing him that an arbitration hearing would take place on November 1, 2 and 3, 1999. The Notice of Hearing includes the following paragraph which reflects the provisions of subsection 7(1) of the Statutory Powers Procedure Act ("SPPA") and Rule 34.5 of the Dispute Resolution Practice Code ("Practice Code”).

You may attend this hearing in person and/or be represented. 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.

I am not persuaded that I have the authority to make an arbitration order against Mr. Taheri-Yeilagh because he did not attend the hearing. For that reason, I will not dismiss Mr. Taheri-Yeilagh's application based only on his failure to appear. However, I am satisfied that every effort has been made to give proper notice to Mr. Taheri-Yeilagh in accordance with the SPPA and the Practice Code.

Mr. Taheri-Yeilagh did not contact Wawanesa, Mr. Cormack or the Commission about his non-attendance at the hearing. In accordance with subsection 7(1) of the SPPA and Rule 34.5 of the Practice Code, I proceeded with the hearing.

History of Proceedings

Mr. Cormack, counsel for Wawanesa, attended the hearing and submitted a document brief. Wawanesa requested that an adverse inference be drawn against Mr. Taheri-Yeilagh for his failure to comply with the Arbitrator's orders outlined in the pre-hearing discussion letter of December 1, 1998 and the direction given by the Executive Coordinator/Registrar of the Commission in correspondence dated September 1, 1999.

Due to Mr. Taheri-Yeilagh's failure to comply with the Arbitrator's production orders, a resumption of the pre-hearing discussion was scheduled for January 12, 1999 and notices were forwarded to the parties on November 24, 1998. In a fax dated November 24, 1998, Mr. Taheri-Yeilagh advised that he would not participate in a further pre-hearing discussion.

By letter dated January 19, 1999, Wawanesa forwarded the list of productions ordered by the Arbitrator and authorizations permitting the disclosure of such documents. Also, Mr. Taheri-Yeilagh was advised that he could pick up copies of Wawanesa's surveillance tapes.

Although Mr. Taheri-Yeilagh attended at Wawanesa's offices on January 27, 1999, he did not take the surveillance tapes. A further request for the signed authorizations was made by Wawanesa on February 10, 1999.

By correspondence dated February 24, 1999, Senior Arbitrator Rotter wrote to the parties confirming her discussion with Mr. Taheri-Yeilagh, where he had indicated that he would pick up the surveillance videos and other supporting documentation while, at the same time, providing the required authorizations. He was to contact Wawanesa to schedule an appointment. However, Wawanesa sent further correspondence dated March 8, 1999 requesting the productions which remained outstanding.

By letter dated March 16, 1999, Wawanesa advised Senior Arbitrator Rotter that Mr. Taheri-Yeilagh had telephoned and refused to provide any authorizations for the release of documents ordered to be produced. On March 24, 1999, Senior Arbitrator Rotter confirmed that Mr. Taheri-Yeilagh had advised the Commission that he did not intend to comply with the production orders made at the pre-hearing discussion. At that time, she alerted him to Rule 32.5 of the Practice Code about the consequences of failing to comply with production orders.

On May 6, 1999, Wawanesa forwarded to Mr. Taheri-Yeilagh a summary of surveillance and advised him that the videos were available at their office for pick up, at which time authorizations for the release of his documentation could be provided. Further, Wawanesa advised that it would be objecting to Mr. Taheri-Yeilagh leading any evidence at the arbitration and that it would be asking for the arbitration to be dismissed with full costs awarded to Wawanesa.

By letter dated August 27, 1999, Wawanesa wrote to the Commission and Mr. Taheri-Yeilagh confirming that Mr. Taheri-Yeilagh had not complied with the Arbitrator's orders made at the pre-hearing discussion.

On September 1, 1999, the Executive Coordinator/Registrar of the Commission wrote to Mr. Taheri-Yeilagh advising that his failure to comply with production orders would be considered by the hearing arbitrator in the context of an award for expenses. She directed Mr. Taheri-Yeilagh to provide her with a list of outstanding productions and their status by September 13, 1999. If Mr. Taheri-Yeilagh failed to respond by September 13, 1999, the letter served as notice that he would be in contempt of the production orders and would not be permitted to file any further documentation without specific leave from the hearing arbitrator. Mr. Taheri-Yeilagh was advised that an adverse inference might be drawn and an order for expenses could be made against him. He was asked to come to the hearing prepared to respond to the preliminary issue which would be raised and could result in an order of contempt being issued against him.

On September 28, 1999, Wawanesa wrote to the Executive Coordinator/Registrar of the Commission to advise that the September 13, 1999 deadline had passed and Wawanesa had not received any documentation from Mr. Taheri-Yeilagh. No authorizations for the release of documents ordered to be produced were provided to Wawanesa by Mr. Taheri-Yeilagh.

Entitlement to Income Replacement Benefits

Mr. Taheri-Yeilagh had the onus of proving his claim for weekly income replacement benefits on the balance of probabilities. In the absence of any evidence, I dismiss his claim.

Repayment of Benefits Already Paid to Mr. Taheri-Yeilagh Under Sections 47 and 48 of the Schedule

Wawanesa asked for reimbursement of benefits already paid to Mr. Taheri-Yeilagh. It submitted that Mr. Taheri-Yeilagh failed to comply with the requirements of the Schedule and the Practice Code at every stage of the process. However, no evidence was presented to support a finding against the Applicant under sections 47 and 48 of the Schedule. Therefore, I dismiss this claim.

Award Against Mr. Taheri-Yeilagh Pursuant to Subsection 282(11.2) of the Insurance Act

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 of the Insurance Act.

I was not presented with any evidence or submissions that Mr. Taheri-Yeilagh was not involved in an accident, nor that he did not suffer some injury or impairment that could have been attributable to the accident. Mr. Taheri-Yeilagh could reasonably have believed that he came within the criteria of section 4 of the Schedule.

I am not satisfied that the Applicant's case was so devoid of merit or substance as to be found "frivolous" at the time of his application for arbitration. He wished to claim the continuation of benefits to which he felt some entitlement.

The submissions made by Wawanesa related to abuse of process and delays by the Applicant. These issues relate to the criteria for a claim of expenses under subsection 282(11) of the Insurance Act and do not address specifically the state of affairs as they existed at the time the Applicant commenced the arbitration. I find that at the time of the application, there were issues of substance between Wawanesa and Mr. Taheri-Yeilagh that could reasonably have been arbitrated.

EXPENSES:

Mr. Taheri-Yeilagh's Expenses

Mr. Taheri-Yeilagh claimed his expenses in this arbitration. Applicants have generally received their expenses, whether successful or not, unless the application was frivolous, vexatious or the applicant's conduct unreasonably prolonged the proceedings. In addition, arbitrators, in exercising their discretion to make an award of expenses, for applications filed after November 1, 1996, also consider the criteria of Rule 73.2 of the Practice Code.

I find that Mr. Taheri-Yeilagh's conduct has repeatedly prolonged this proceeding. By consistently failing to obey production orders and failing to appear at the arbitration hearing, Mr. Taheri-Yeilagh caused Wawanesa to incur unnecessary expense and delay. I decline to award Mr. Taheri-Yeilagh his expenses. To do so would be to undermine the legislative scheme for speedy and inexpensive dispute resolution and reward Mr. Taheri-Yeilagh for the disrespect he has shown for the arbitration process.

Wawanesa's Expenses

The Application for Arbitration in this matter was commenced after amendments to the Insurance Act were passed in 1996. These amendments allow an arbitrator to award expenses in favour of an insurer. Rule 73 of the Practice Code sets out criteria for the Arbitrator's consideration when awarding expenses. According to paragraph 73.2(b), an Arbitrator may consider any conduct of a party that "...tended to prolong, obstruct or hinder the proceeding ..." I find that Mr. Taheri-Yeilagh has effectively prolonged, hindered or obstructed the speedy resolution of this matter.

Wawanesa claimed legal fees of $6,674 and disbursements of $216.89. I find the legal fees claimed for the services of both a senior and a junior litigation lawyer and a law clerk to be excessive. I fix the legal fees at $2,000. I award the entire amount of disbursements of $216.89 to cover the reasonable costs of photocopying, courier service and reproduction of surveillance videos.

Wawanesa is accordingly entitled to its expenses in the amount of $2,216.89.

January 21, 2000

Judith Killoran Arbitrator

Date