Evtim Videnov v. Royal Insurance Company of Canada, 2000 ONFSCDRS 45

Neutral Citation: 2000 ONFSCDRS 45

FSCO A98-000021

BETWEEN:

EVTIM VIDENOV

Applicant

and

ROYAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Anne L. Sone

Heard:

October 6, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto

Appearances:

Daniel F. Daly for Mr. Videnov

Mark Baker for Royal Insurance Company of Canada

The Applicant, Evtim Videnov, was injured in a motor vehicle accident on April 12, 1994. He applied for and received statutory accident benefits from Royal Insurance Company of Canada ("Royal"), payable under the Schedule.¹ Royal terminated weekly other disability benefits on August 22, 1994. The parties were unable to resolve their disputes through mediation, and Mr. Videnov 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 "Insurance Act") .

Should this arbitration be dismissed?
Is Royal entitled to an award under subsection 282(11.2) of the Insurance Act, in the amount of its assessment fee?

This arbitration may proceed.
Royal is not entitled to an award under subsection 282(11.2) of the Insurance Act.

1. History of Proceedings:

Mr. Videnov was injured in a motor vehicle accident on April 12, 1994. He was sitting in the driver's seat of his vehicle where he had stopped in a gas station to put air into his car's tires. He had removed his seat belt when a large truck hit his car in front.

Mr. Videnov alleges that the impact of the collision thrust his body to the right and then to the left, and that his body sustained a lateral whiplash type of force. Some two to three hours after the accident, Mr. Videnov complained of a headache. The following day, he saw his family physician for this complaint and was given a painkiller. Since the time of the accident, he has complained of frequent headaches with a pressure-like pain. This pain is severe at times. The headache will start with a numb sensation in his face and then progress to pain around his eyes and mouth. It moves from his face to his mid-back.

Royal paid a weekly other disability benefit at the rate of $185 from April 19 to August 22, 1994. It maintains that Mr. Videnov has been unable to demonstrate any entitlement to an income replacement benefit and that he is not entitled to any weekly benefit after August 22, 1994.

Mr. Videnov was also injured in a subsequent motor vehicle accident on October 18, 1996, which involves a different insurer.

Mr. Videnov claims supplementary medical expenses for assessment and treatment provided by the Cranial Cervical Rehabilitation Institute, in the amount of $3,100. Royal denies that there are any treatment expenses outstanding arising from the motor vehicle accident of April 12, 1994. It states that Mr. Videnov may have a claim for treatment expenses as a result of the second accident.

Mr. Videnov applied for mediation of his dispute with Royal. According to the report of the mediator dated October 30, 1997, the following issues remained in dispute: entitlement to weekly income replacement benefits of $185 from August 22, 1994 to September 28, 1996; physiotherapy assessment and treatment expenses and interest on outstanding payments. Mr. Videnov applied for arbitration of the dispute.

On behalf of Royal, Mr. Kostyniuk wrote to Mr. Videnov's counsel, Daniel F. Daly, on February 3, 1998. In anticipation of the pre-hearing discussion, he requested certain productions. On February 13, 1998, Mr. Kostyniuk wrote to Mr. Daly advising him that an appointment had been made with Dr. Bruce Stewart, a neurologist at Canadian Trauma Consultants Ltd., for an insurer's medical examination. On April 21, 1998, Mr. Kostyniuk wrote again to Mr. Daly requesting a response to his letter of February 13, 1998.

On May 4, 1998, a pre-hearing discussion was held at the Commission. Mr. Videnov was represented by Mr. Julian Thomas. Mr. Joseph Rizzotto attended on behalf of Royal. The pre-hearing letter confirmed the issues in dispute, the production requirements and the dates of the arbitration hearing, which were set for July 5, 6, 7 and 8, 1999. The letter also indicated that Royal had scheduled Dr. Stewart to assess Mr. Videnov on July 22, 1998. A resumption of the pre-hearing was scheduled for September 28, 1998, to allow for further settlement discussions once Dr. Stewart's report would be available.

After the pre-hearing on May 4, 1998, Mr. Rizzotto, on behalf of Royal, wrote to Mr. Daly confirming the documents undertaken or ordered to be produced at the pre-hearing. Mr. Rizzotto also requested a response regarding Mr. Videnov's scheduled attendance before Dr. Stewart. On May 28, 1998, Mr. Thomas, on behalf of Mr. Videnov, wrote to Mr. Rizzotto confirming the production undertakings and stating that the correspondence regarding the insurer's medical examination before Dr. Stewart on July 22, 1998, was not in his file. Mr. Rizzotto responded to this letter on June 16, 1998 attaching earlier correspondence as well as productions which he had undertaken to provide.

On June 30, 1998, Royal's representatives received a facsimile transmission from Mr. Daly's office advising that Mr. Videnov would not be available for the scheduled examination before Dr. Stewart. There was no further explanation given at that time.

On July 6, 1998, Mr. Kostyniuk wrote to Mr. Daly seeking the whereabouts of Mr. Videnov and the reason why he could not see Dr. Stewart on July 22, 1998. On July 7, 1998, Ms. Karen Howe, on behalf of Royal, sought a resumption of the pre-hearing to seek an interim order with respect to the attendance of Mr. Videnov before Dr. Stewart on July 22, 1998. Mr. Daly was unavailable on the date tentatively scheduled of July 20, 1998. The resumption of the pre-hearing was eventually rescheduled for September 28, 1998.

Mr. Daly sent a facsimile transmission to Royal's representatives dated June 31, 1998, but not received until July 31, 1998. In it he advised that Mr. Videnov had been deported from Canada to his native Bulgaria.

The resumption of the pre-hearing was held on September 28, 1998. Neither Mr. Videnov nor his counsel, Mr. Daly, attended. Ms. Howe represented Royal. She advised that Mr. Videnov had been deported to Bulgaria and had not attended the scheduled medical examination with Dr. Stewart on July 22, 1998.

On October 23, 1998, Mr. Daly wrote to the Commission requesting a resumption of the pre-hearing due to his failure to diarize the previous pre-hearing. By letter dated October 26, 1998, Ms. Howe indicated that she did not consent to such a resumption.

On November 16, 1998, Ms. Howe wrote to Mr. Daly asking him if he could advise if Mr. Videnov would attend the insurer's medical examination scheduled for December 16, 1998. She also sent a follow-up letter on December 2, 1998. Due to the lack of response, Ms. Howe cancelled the December 16, 1998 appointment and advised Mr. Daly and the Commission accordingly. On December 5, 1998, Mr. Daly sent a letter by ordinary mail to Mr. Kostyniuk's office. It was received after December 14, 1998. In it he states that Mr. Videnov was deported from Canada, and would not be able to attend at the scheduled insurer's medical examination scheduled for December 16, 1998. Mr. Daly undertook that upon his return to Canada, Mr. Videnov would make himself available for an insurer's medical examination with Dr. Stewart.

There was a further pre-hearing on January 5, 1999. Mr. Daly advised that he had no direct contact with Mr. Videnov, but that he did have contact with Mr. Videnov's son who had power of attorney.

On January 6, 1999, Ms. Howe wrote to Mr. Daly outlining her understanding of Canadian immigration law. She inquired whether he exited Canada on a departure notice or a deportation notice and asked that Mr. Videnov make plans to return to Canada in order to attend an insurer's medical examination with Dr. Stewart. She then sent follow-up letters on January 20, February 8, March 2, March 23, March 25, April 27, May 28 and June 22, 1999. In the letter dated May 28, 1999, she also reminded Mr. Daly of his outstanding productions. In the letter dated June 22, 1999, she indicated that Mr. Videnov's counsel had not responded to any of her inquiries and had not provided any of the information requested. She requested a resumption of the pre-hearing to address her concerns.

By letters dated June 17 and June 23, 1999, Mr. Daly requested an adjournment of the arbitration scheduled for July 5, 6, 7 and 8, 1999, until such time as Mr. Videnov could return to Canada. He indicated that Mr. Videnov was in Bulgaria and was attempting to secure permission to return to Canada. He reiterated that Mr. Videnov would attend an insurer's medical examination when he returned to Canada.

In a letter dated June 24, 1999, Ms. Howe wrote to the Commission (with a copy to Mr. Daly) outlining all the correspondence that had been sent in an effort to obtain information from Mr. Daly's office. She requested evidence of Mr. Videnov's efforts to return to Canada and any information with respect to his status which might assist in determining the possibility of Mr. Videnov being allowed to return. She also requested copies of any documents refusing or delaying his application. She indicated that Royal was not consenting to the adjournment request.

By letter dated June 24, 1999, the Applicant's adjournment request was granted. A resumption of pre-hearing requested by the parties was scheduled for July 6, 1999. Ms. Howe sent a follow-up letter dated June 28, 1999 inquiring as to whether Mr. Daly had been able to contact his client.

Due to the parties' scheduling conflicts, the pre-hearing resumption scheduled for July 6, 1999 was adjourned on consent to October 6, 1999.

Ms. Howe sent further follow-up letters dated August 6 and September 13, 1999 to Mr. Daly.

Ms. Jill Burrows of Mr. Daly's office provided an affidavit dated October 6, 1999. She stated that she had spoken with Mr. Videnov's son. He is hopeful that his father will be able to return to Canada within the next six to eight months. An immigration lawyer is assisting the Videnov family in their attempts to have Mr. Videnov return to Canada on his son's sponsorship. It was submitted, however, that due to the current war in the Balkans there is no Canadian embassy in Bulgaria. Residents of Bulgaria must make applications for landed immigrant status in Canada through a neighbouring country.

2. Submissions:

Royal submits the following grounds for its application to dismiss this arbitration:

Mr. Videnov has failed to diligently pursue his Application for Arbitration;
Mr. Videnov has failed to provide information concerning his deportation order, his expected return date, and dates when he might reasonably be expected to attend an insurer's medical examination prior to the arbitration date;
Should Mr. Videnov not be able to return to Canada, Royal will be prejudiced both by its inability to properly have a medical examiner of its choice perform an assessment of Mr. Videnov's alleged disability and medical condition, and will be further prejudiced by the inability to be able to cross-examine Mr. Videnov at the arbitration hearing.
Mr. Videnov has failed to provide any information as undertaken at the pre-hearing of this matter, despite the availability of Mr. Videnov's son in Canada to obtain this information, as confirmed in writing on May 5, 1998.

Counsel for Royal referred to Zeko and Progressive Casualty Insurance Company² for authority to dismiss this arbitration. That arbitration proceeding was dismissed on the basis that it was premature, since the issues that were the subject of the arbitration had not been mediated. Arbitrator Manji stated that Mrs. Zeko could recommence her Application for Arbitration at some future date, after the issues that were the subject of her Application for Arbitration were mediated and if the mediation has failed. She explicitly stated that she was not satisfied that she had the authority to dismiss the arbitration on the basis of the Applicant's counsel's delay. I am also not persuaded that I have the authority to dismiss this claim for failure to pursue it diligently.

At the resumption of the pre-hearing Mr. Daly gave the following undertakings in addition to the ones he had given previously.

Mr. Daly will prepare a sufficient power of attorney to allow Mr. Videnov's son to comply with Mr. Videnov's outstanding undertakings. This will be done at Royal's reasonable expense for photocopying and administrative costs.
Mr. Videnov undertakes as soon as he is back in Canada to

a) comply with any undertakings left outstanding within 60 days or show that diligent efforts have been made to comply; and

b) to make himself available for an insurer's medical examination.

Mr. Videnov has stated that he is willing to attend an insurer's medical examination in Bulgaria.

3. Analysis:

According to settled case-law,³ I have no authority to dismiss Mr. Videnov's claim solely on the basis that he does not attend at a hearing. By extension, it is questionable whether I have authority to dismiss his claim for failure to pursue it diligently. It must be dealt with on the merits. In this case, Mr. Videnov continues to be represented by counsel. The hearing was adjourned due to the Applicant's deportation to Bulgaria. According to the affidavit of Ms. Burrows, he is making efforts to return. It is still unclear, however, when, if ever, he will be able to come back to Canada for this arbitration. This is a very unusual situation.

Royal has made every effort to obtain more information and move this claim forward. I understand its frustration. Since the date of Mr. Videnov's return is unknown, it is impossible to schedule an insurer's medical examination. However, Mr. Videnov is not refusing to attend such an examination. On the contrary, he is undertaking to make himself available for an examination as soon as he returns or in Bulgaria where he now resides.

Royal is also concerned that it will be prejudiced should Mr. Videnov not be able to return to Canada for an insurer's medical assessment. It will also be prejudiced if Mr. Videnov is not available for cross-examination. While this may be true, Mr. Videnov himself will be prejudiced, if he is not available to attend for his arbitration and give evidence.

Mr. Videnov's counsel has undertaken to prepare a sufficient power of attorney, at Royal's reasonable expense to comply with outstanding undertakings. In addition, Mr. Videnov is to comply with any other outstanding undertakings as soon as he returns to Canada or show that diligent efforts have been made to comply.

In all of these circumstances, I am not prepared to dismiss the application at this time. However, I do wish to note that section 23 of the Statutory Powers Procedure Act,⁴ allows a tribunal to make such orders as it considers proper to prevent abuse of its processes. On this basis, I order that another resumption of the pre-hearing in this case be scheduled by no later than April 14, 2000. Mr. Videnov or his counsel must attend this resumption to provide an update regarding his outstanding undertakings and current circumstances, including, details of his efforts to return to Canada and information with respect to the possibility of being allowed to return.

4. Assessment Fee

Royal also claims its assessment fee of $3,000 pursuant to subsection 282(11.2) of the Act which provides:

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...

I concur with Arbitrator McMahon's statement in Richard and Lombard General Insurance Company of Canada,⁵ that the insurer is only entitled to relief under this section if it is called upon to respond to, and pay the assessment fee in respect of, cases that are so devoid of merit as to be frivolous, or were launched to vex the insurer, or are in and of themselves, an abuse of the process. The insertion of the word "commences" focuses the inquiry on the state of affairs as they existed at the time the action was launched, and not on later procedural steps. I am not persuaded that this case meets this criteria. At the very least, Mr. Videnov's claims would appear to be arguable at the time that the arbitration was commenced. Accordingly, I am not prepared to order the Applicant to pay the Insurer's assessment fee.

Royal also referred to Zeko⁶ as authority to order Mr. Videnov to pay the assessment fee. However, the facts of that case were very different. The arbitrator found that Mrs. Zeko had commenced an arbitration that was an abuse of process. At the time that she commenced her arbitration there were no issues in dispute between Mrs. Zeko and Progressive Casualty Insurance Company ("Progressive"). She had not even submitted her claims to Progressive. She had, therefore, also failed to mediate any issues in dispute, as required by subsection 281(2) of the Insurance Act. Also, at the time Mrs. Zeko commenced her arbitration, a court proceeding against Progressive had already been commenced for the same relief (entitlement to statutory accident benefits) sought in the arbitration.

I note that Mr. Videnov and his counsel have given a number of undertakings. If either one has not complied with outstanding undertakings by the time of the resumption of the pre-hearing, recent amendments to the Insurance Act permit an arbitrator to award expenses in favour of an insurer. Rule 73 of the Dispute Resolution Practice Code (Third Edition, April 15, 1997) sets out several criteria for the arbitrator's consideration. In particular, under (b), an arbitrator may consider any conduct of a party that "tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders." This gives an arbitrator the authority to award expenses, if these undertakings are not fulfilled on a timely basis.

Aside from Royal's claim for an award in the amount of its assessment fee, Royal did not seek expenses during its application to dismiss this arbitration. If Mr. Videnov or his counsel have not complied with outstanding undertakings, or made diligent efforts to comply by the time of the resumption of the pre-hearing, I will expect the parties to address the issue of expenses.

February 29, 2000

Anne Sone

Arbitrator

Date