Neutral Citation: 2000 ONFSCDRS 74
FSCO A98-001203
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
CINDY BAIRD
Applicant
and
PILOT INSURANCE COMPANY
Insurer
REASONS FOR DECISION
Before:
Beth Allen
Heard:
April 3, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Ms. Baird did not appear nor did a legal representative on her behalf
Rudolph Lobl For Pilot Insurance Company
Issues:
The Applicant, Cindy Baird, was injured in a motor vehicle accident on June 11, 1997. She applied for income replacement benefits (IRBs) from Pilot Insurance Company ("Pilot"), payable under the Schedule.1 Pilot declined to pay IRBs since Ms. Baird failed to produce the financial documents required to calculate the benefit rate. The parties were unable to resolve their disputes through mediation, and Ms. Baird 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. Baird entitled to receive weekly ongoing IRBs from June 18, 1997 onwards pursuant to section 4 of the Schedule?
What is the correct amount of Ms. Baird's IRB?
Is Pilot liable to pay Ms. Baird's expenses incurred in respect of the arbitration hearing pursuant to subsection 282(11) of the Act?
Is Ms. Baird liable to pay Pilot's expenses incurred in respect of the arbitration hearing?
Is Ms. Baird liable to pay Pilot an amount not exceeding its arbitration filing fee pursuant to subsection 282(11.2) of the Act on the basis that the commencement of the arbitration was frivolous, vexatious or an abuse of process?
Ms. Baird claims interest on overdue payments pursuant to section 46 of the Schedule.
Result:
Ms. Baird is not entitled to receive any IRBs pursuant to section 4 of the Schedule.
Pilot is not liable to pay Ms. Baird's expenses incurred in respect of the arbitration hearing pursuant to subsection 282(11) of the Act.
Pursuant to subsection 282(11) of the Act, Ms. Baird is liable to pay a portion of Pilot's expenses to be assessed once a bill of expenses is submitted.
Ms. Baird is liable to pay Pilot an award of $1,000 pursuant to subsection 282(11.2) of the Act.
As there are no overdue payments, there is no interest owing pursuant to section 46 of the Act.
EVIDENCE AND ANALYSIS:
Background:
The arbitration hearing began as scheduled on April 3, 2000 at 10:00 a.m. The proceeding was delayed one-half hour to await Ms. Baird's attendance. Neither she nor anyone on her behalf appeared. Mr. Lobl and his assistant, Ms. Chateauvert, appeared for Pilot.
Ms. Baird failed to attend the initial pre-hearing discussion on January 20, 1999 and the subsequent resumptions on April 9, 1999 and March 24, 2000. In each case, the Commission notified Ms. Baird by a Notice of Pre-Hearing (dated October 22, 1998) and Notices of Resumption of Pre-Hearing (dated January 22, 1999 and March 20, 2000), sent to her last known address. There is no evidence that she changed addresses. Ms. Baird failed in each case to notify her legal representative, the Commission or Pilot that she would not be attending the pre-hearing discussions. Agreements on productions were arrived at, and production orders were made at the January 20 and April 9 pre-hearing discussions. The Commission mailed copies of all three pre-hearing summary letters to Ms. Baird.
Subsequent to the first and second pre-hearing discussions, Mr. Lobl corresponded with Mr. Azevedo (Ms. Baird's past legal representative) to inquire about Ms. Baird's productions. It seems that Mr. Azevedo was unable to fully respond to Pilot's production requests because Ms. Baird was out of the country. By letter dated March 8, 1999, Mr. Azevedo indicated that he had finally been in touch with Ms. Baird. According to Mr. Azevedo, she refused to sign authorizations for Revenue Canada to disclose her income tax records because she had never filed returns and did not want to alert Revenue Canada to this.
The hearing dates were set at the April 9, 1999 pre-hearing resumption. By Notice of Hearing dated April 22, 1999, the Commission notified Ms. Baird, Pilot's representative and both legal representatives of the hearing. The Notice of Hearing contains the following paragraph which reflects the substance of subsection 7(1) of the Statutory Powers Procedure Act ("the SPPA") and Rule 34.5 of the Dispute Resolution Practice Code (the "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.
In a letter to the Commission dated August 10, 1999, Mr. Azevedo requested to be removed as counsel of record because Ms. Baird failed to respond to his correspondence and to provide instructions. He also sent Ms. Baird correspondence dated December 10, 1999 and February 9, 2000 expressing his wish to be removed as counsel of record for the arbitration. In the December 10, 1999 letter, Mr. Azevedo expressed concern that Ms. Baird had failed to provide instructions and to respond to production undertakings.
At the March 24, 2000 resumption of the pre-hearing discussion, he again requested to be removed from the record on the basis that he could not obtain instructions from Ms. Baird. The pre-hearing arbitrator granted Mr. Azevedo's request.
As noted above, Ms. Baird did not attend the hearing and she gave no prior notice or explanation for failing to attend. However, I am satisfied that reasonable efforts have been made to give Ms. Baird proper notice in accordance with the SPPA and the Code.
In her Application for Arbitration, Ms. Baird claims entitlement to ongoing weekly IRBs under section 4 of the Schedule at $400 per week from June 18, 1997 onwards. However, she has brought no medical or financial evidence to support her disability or quantum claims.
Ms. Baird was self-employed as an accountant/bookkeeper before the accident. She prepared and provided to Pilot an Employer's Confirmation of Income dated July 14, 1997. She also prepared an income statement appended to a letter dated July 25, 1997. Pilot filed these documents into evidence. Pilot retained an accounting firm to calculate Ms. Baird's IRB rate. The accounting firm corresponded with Ms. Baird on several occasions (August 13, 1997, October 24, 1997, January 5, 1998, March 2, 1998 and May 5, 1998) requesting a number of business and financial documents. Pilot submitted this correspondence into evidence. Ms. Baird failed to provide the requested documentation. She did not respond to the accountants until December 1997 when, with her December 30, 1997 letter (referred to in the accountants letter of January 5, 1998), she enclosed only bank statements for her personal bank account for approximately the year before the accident.
Pilot requests an order dismissing the arbitration and further orders for its expenses and the amount of its filing fee under subsections 282(11) and (11.2) of the Act respectively. Pilot asserts that Ms. Baird has not cooperated with Pilot's efforts to assess her claim and has failed to produce evidence to substantiate her claim. Pilot submits that Ms. Baird's claim is frivolous, vexatious and an abuse of process, and should be dismissed.
Entitlement to Income Replacement Benefits:
Ms. Baird has the burden to prove on a balance of probabilities her entitlement to IRBs and the rate of those benefits. In the absence of any evidence to prove her claims, I dismiss the matter.
EXPENSES:
Subsection 282(11) of the Act allows an arbitrator to award expenses to either the insured person or the insurer. Rule 73 of the Code enumerates the criteria to be considered in an award of expenses. These criteria include: the parties' degree of success or failure in the outcome; the conduct of the parties that tended to shorten or prolong the proceeding; whether a position taken by either party was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process; the complexity or novelty of the case; the circumstances around settlement, and any other matter the arbitrator considers relevant.
Commission cases have held that the fact that an insured person has been unsuccessful in the outcome of a proceeding should not in itself determine in all cases whether parties should be awarded their expenses or not. Insured persons with legitimate claims conducted reasonably have succeeded in recovering their allowable expenses. However, expenses have been disallowed for unmeritorious, dishonest and fraudulent claims.
Ms. Baird's Expenses
I conclude that Ms. Baird is not entitled to her arbitration expenses. Throughout the process, she has failed to communicate and cooperate with her counsel, Pilot and its representatives. Her conduct has prolonged the process in that additional pre-hearing resumptions were required to be convened because of her previous non-attendance and non-participation in the process. She refused to cooperate by producing the financial information and medical documentation pertinent to her claims. She ultimately did not attend the hearing and failed to advise the Commission or Pilot of her intention not to attend. I conclude that on the whole, Ms. Baird has demonstrated an obvious disregard for and disrespect of the arbitration process and, for this reason, I deny her her expenses.
Pilot's Expenses
In consideration of Ms. Baird's conduct as outlined, I award Pilot a portion of its expenses of the arbitration. I requested that Mr. Lobl submit his bill of expenses to the Commission after which I will assess Ms. Baird's liability for these expenses.
An Award Against Ms. Baird under Subsection 282 (11.2) of the Act
Subsection 282(11.2) of the Act provides that an arbitrator may order an award of up to the amount of an insurer's assessment fee if the insured person's claim is found to be manifestly unfounded, frivolous, vexatious or an abuse of process.
Ms. Baird did not cooperate with her counsel or Pilot or participate in the arbitration process, but this does not lead me, in the absence of more information, to conclude that her claims are frivolous or vexatious. On their face, the disability and quantum issues Ms. Baird raised are bona fide and justiciable issues. However, I find that the manner in which she conducted herself by advancing claims and then subsequently not cooperating in production, failing to respond to communications and to attend the pre-hearing discussions and the arbitration hearing, amounts to an abuse of the arbitration process. For this reason, I impose an award of $1,000 on Ms. Baird for this conduct.
April 20, 2000
Beth Allen
Arbitrator
Date
Neutral Citation: 2000 ONFSCDRS 74
FSCO A98-001203
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
CINDY BAIRD
Applicant
and
PILOT INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The arbitration is dismissed.
Pilot is not liable to pay Ms. Baird's expenses.
I defer my decision on Ms. Baird's liability to pay a portion of Pilot's expenses until Mr. Lobl submits a bill of expenses.
Ms. Baird is liable to pay an award of $1,000 pursuant to subsection 282(11.2) of the Act.
April 20, 2000
Beth Allen
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.