Neutral Citation: 2001 ONFSCDRS 69

FSCO A00-000136

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

UNG VAN NGUYEN

Applicant

and

SCOTTISH & YORK INSURANCE COMPANY LIMITED

Insurer

REASONS FOR DECISION

Before:

David Leitch

Heard:

April 17, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

No one appeared for Mr. Nguyen

Guy Farrell for Scottish & York Insurance Company Limited

Issues:

In his application for arbitration, Mr. Ung Van Nguyen claimed to have been injured in a motor vehicle accident on May 15, 1999. He applied for statutory accident benefits from the Insurer, Scottish & York Insurance Company Limited ("Scottish & York"), payable under the Schedule.¹ The parties were unable to resolve disputes regarding Mr. Nguyen's entitlement to benefits through mediation, and Mr. Nguyen applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the pre-hearing, the following were identified as issues for arbitration:

1. Is Mr. Nguyen entitled to receive a weekly income replacement benefit of $366.77 for the period of May 21, 1999 to February 16, 2000, pursuant to section 4 of the Schedule.

2. Is Mr. Nguyen entitled to receive a medical benefit of $521.52 for acupuncture treatments performed at The Acupuncture Centre claimed pursuant to section 14 of the Schedule.

3. Is Mr. Nguyen entitled to receive a rehabilitation benefit of $3,804.22 for physiotherapy treatments incurred at DN Physiotherapy & Rehab Clinic Inc. claimed pursuant to section 15 of the Schedule.

4. Is Mr. Nguyen liable to pay an amount to Scottish & York that does not exceed the amount assessed against Scottish & York in respect of the arbitration, pursuant to subsection 282(11.2) of the Insurance Act, because he commenced an arbitration that is frivolous, vexatious or an abuse of process?

5. Is Scottish & York liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Nguyen.

6. Is Scottish & York liable to pay Mr. Nguyen's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

7. Is Mr. Nguyen liable to pay Scottish & York's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

8. Is Mr. Nguyen entitled to interest on any amounts owing to him?

Result:

1. Mr. Nguyen is not entitled to receive a weekly income replacement benefit for the period of May 21, 1999 to February 16, 2000, pursuant to section 4 of the Schedule.

2. Mr. Nguyen is not entitled to receive a medical benefit for acupuncture treatments performed at The Acupuncture Centre claimed pursuant to section 14 of the Schedule.

3. Mr. Nguyen is not entitled to receive a rehabilitation benefit for physiotherapy treatments incurred at DN Physiotherapy & Rehab Clinic Inc. claimed pursuant to section 15 of the Schedule.

4. Mr. Nguyen is not liable to pay Scottish & York an award under 282(11.2) of the Insurance Act.

5. Scottish &York is not liable to pay a special award pursuant to subsection 282(10) of the Insurance Act.

6. Scottish &York is not liable to pay Mr. Nguyen's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

7. Mr. Nguyen shall pay Scottish & York's expenses in respect of the arbitration which are fixed at $4,776.02.

The Hearing:

The original dates for the hearing were December 11 through 14, 2000. They were set at the pre-hearing discussion on June 30, 2000 in which both Mr. Nguyen and his representative, Mr. David Pham of the law firm of Pace, Johnson, participated.

On December 8, 2000, the hearing was adjourned, on consent, to April 17 through 20, 2001.

On Friday, April 6, 2001, Mr. Michael Krylov, also of the law firm of Pace, Johnson, made a written request to be removed as Mr. Nguyen's representative on the following grounds: "we have attempted since November 2000 to contact Mr. Nguyen by phone and letters to no avail".²

On Monday, April 9, 2001, the Commission received a further written communication from Mr. David Pham which stated:

This is further to our letter dated April 6, 2001.

Kindly be advised that by chance [the] writer met with Mr. Ung Van Nguyen on Saturday night and spoke to him about his claim and the upcoming Arbitration Hearing. Writer advised Mr. Nguyen that as we had been unable to contact him to either obtain instructions or to prepare for the arbitration hearing, we had no choice but to withdraw as counsel of records [sic] from this matter. Mr. Nguyen advised that he would retain other counsel to represent him at this arbitration hearing. Writer also asked Mr. Nguyen for his current address and phone number but was refused.³

On April 10, 2001, Arbitrator Palmer removed Pace, Johnson as solicitors of record for Mr. Nguyen and excused that firm from any obligation to attend the hearing.

On April 17, 2001, the Insurer was represented at the hearing by its counsel, Mr. Guy Farrell. Neither Mr. Nguyen nor anyone else on his behalf appeared at the hearing. I was nevertheless satisfied, based on the contents of Mr. Pham's letter of April 9, 2001, that Mr. Nguyen received notice of the hearing and I proceeded with the hearing in his absence.

I obviously received no evidence from Mr. Nguyen in support of his various claims. However, Mr. Farrell entered evidence in support of the Insurer's claims for an award under section 282(11.2) of the Insurance Act and for expenses. I have assessed this evidence for its capacity to support the claims of either party.

Mr. Nguyen's claims:

The only medical document entered into evidence was a letter dated April 17, 2001 to Mr. Farrell from Dr. Lorne Sokol which reads, in its entirety, as follows:

I am a General Practitioner licensed in the Province of Ontario. I am presently seeing patients in the above office and on housecalls. I am a certified specialist in Family Medicine, Acupunture and Pain Management.

As you are aware Mr. Ung Van Nguyen was initially assessed in my office on June 9, 1999. Mr. David Pham of the law firm of Pace, Johnson referred him to me. This patient was referred to the D.N. Physiotherapy and Rehabilitation Clinic at this appointment. The patient brought the referral slip and I completed the form and faxed it to this company.

He was assessed in my office three times for medical treatments and he received five acupuncture sessions.

Mr. Nguyen was last seen on August 6, 1999. If there are additional concerns or I can be of further assistance, please do not hesitate to contact me.⁴

This document does not describe Mr. Nguyen's injuries, does not identify the motor vehicle accident of May 15, 1999 as the cause of the injuries, does not establish the disabling effects of the injuries sustained and does not indicate the nature of the treatment Mr. Nguyen required as a result of these injuries. In the absence of such evidence, I find that Mr. Nguyen failed to discharge the onus upon him to prove his entitlement to the various benefits he claimed. His claims, as listed above, are, therefore, dismissed.

The Insurer's claim for an award under section 282(11.2) of the Insurance Act :

The Law

Section 282(11.2) of the Insurance Act reads as follows:

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.

In his written argument on the proper interpretation of this section⁵, Mr. Farrell maintained that a claim which has no merit can be characterized as frivolous or vexatious, that a failure to attend the hearing can be considered an abuse of process and that a finding of fraud or significant misrepresentation would render the claim at least frivolous "or even beyond frivolous".

I agree with Mr. Farrell that a claim based on fraud or significant misrepresentation is covered by section 282(11.2), notwithstanding the absence of the word "fraudulent" in this section.⁶ However, in my view, the section does not cover a claim in which the applicant simply fails to appear at the hearing. Nor, in my view, does the section cover any claim that is ultimately found by an arbitrator to have been simply without merit. In some of the cases Mr. Farrell cited⁷, and in others in which awards were granted under section 282(11.2)⁸, the applicants failed to appear at the hearing or their claims were described as having been without merit. Nevertheless, these cases also contain or imply findings of serious misrepresentation or other serious misconduct by the applicant which went beyond the applicant's simple failure to appear or to prove his/her case.

At the hearing, Mr. Farrell distinguished one of the decisions⁹ to which I had alluded by pointing to the opening words of section 282(11.2): "If an insured person commences an arbitration...". However, Mr. Farrell's written submissions did not refer to decisions which have considered how these words affect the way in which section 282(11.2) should be interpreted.

In the case of Richard and Lombard General Insurance Company of Canada¹⁰, Arbitrator McMahon was asked to grant an award under section 282(11.2) following the applicant's decision to withdraw his application for arbitration in order to pursue a tort action for the same benefits. In denying the insurer's request for an award, the arbitrator made the following comments about the legislative intent behind section 282(11.2) and about its relationship with the Expense Regulation as incorporated into Rule 73 of the Dispute Resolution Practice Code:

...when the arbitration option was first made available, only insured person could be awarded expenses. In my view, the intent of the drafters of section 282(11.2) was to afford a measure of relief to insurers which were forced to respond to applications for arbitration that should not have been launched, in the first place. The insurer is only entitled to relief under this section if it is called upon to respond to, and pay a filing 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" focus [sic] the inquiry on the state of affairs as they existed at the time the action was launched, and not on later procedural steps. To my mind, a subsequent decision to withdraw an application is insufficient to trigger the section, unless it is part of a larger course of improper conduct tied to the commencement of the arbitration.

Earlier cases which awarded insurers an amount equivalent to the filing fee, on the basis that the withdrawal was an "abuse of process" within the meaning of section 282(11.2), did not have the luxury of the present general expenses provisions found in Rule 73. To my mind it is preferable to deal with cases such as the present, under Rule 73, and to reserve to Section 282(11.2) for the extreme cases it was designed to redress.

The "present" expense provisions to which the Arbitrator was referring are set out in the Expense Regulation and Schedule as follows:

12.(1) The expenses set out in the Schedule are prescribed for the purpose of subsection 282(11) of the Act.

(2) An arbitrator may award expenses to an insurer or insured person under section 282(11) of the Act if the arbitrator is satisfied that the award is justified, having regard to the following criteria:

3. Whether the proceeding or any position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process.

Schedule

Dispute Resolution Expenses

(Subsection 282(11) of the Act)

1. The filing fees paid by the insured person when applying for arbitration may be awarded to the insured person. [an assessment or filing fee paid by the insurer is not included]

The distinction drawn by Arbitrator McMahon in Richard and Lombard seems sensible to me. It tends to reduce the potential for section 282(11.2) of the Insurance Act to overlap with the Expense Regulation. In my view, the former is intended to return to the insurer the filing fee which it should not have been required to pay because the application for arbitration should not have been filed in the first place. The latter is intended to indemnify either party (including an insurer) for arbitration expenses (but not the insurer's filing fee¹¹) incurred due to the other party's insistence on continuing with the proceeding or any position taken by the other party during the course of the proceeding.

I acknowledge that Arbitrator Seife appeared to express the contrary view in the case Dhami and State Farm Mutual Automobile Insurance Company¹², where he wrote that section 282(11.2) of the Insurance Act:

... does not restrict the focus of the inquiry to the commencement of the arbitration application ... subsequent steps in the arbitration process could also be considered in deciding whether the applicant "commenced" an arbitration proceeding that is frivolous, vexatious or an abuse of process.¹³

However, with respect, this interpretation of the section appears to ignore its opening words and to increase, unnecessarily, the potential for overlap with the Expense Regulation. I consider two examples. In the first, an applicant files an arbitration which should never have been filed, and then takes manifestly unfounded, frivolous, vexatious or fraudulent positions which abuse the arbitration process. In my opinion, such an applicant should be exposed to the risk of an award under section 282(11.2) of the Insurance Act and adverse consequences under the Expense Regulation. In the second example, the application for arbitration was not fraudulent or manifestly unfounded when filed, but the applicant later abuses the arbitration process by taking manifestly unfounded, frivolous, vexatious or fraudulent positions. In my opinion, such an applicant should only be exposed to the risk of suffering adverse consequences under the Expense Regulation.

I appreciate that these examples may be easier to describe in theory than to differentiate in practice but, on my analysis of the evidence set out below, I find that this case falls into the second category.

The evidence

Describing Mr. Nguyen's claims as "suspicious", Mr. Farrell identified the following "litany of red flags" which he maintained emerged from the evidence entered on the Insurer's behalf:

1. The driver of the other vehicle, which was rented, did not report any damage to this vehicle to its owner/lessee.

2. The damage to the vehicles conflicts with the description of the accident.

3. Mr. Nguyen failed to appear for Insurer's medical examinations.

4. Mr. Nguyen failed to provide information to the Insurer about his employment at the time of the accident and both he and his employer failed to cooperate with the Insurer's attempt to obtain further information.

5. Mr. Nguyen "ran out of the room" while being interviewed by the Insurer.

6. On his Application for Benefits¹⁴, Mr. Nguyen provided an address and stated that he was separated; his counsel later provided another address¹⁵ which was the same as his wife's and his step-daughter's address.¹⁶

7. Mr. Nguyen only admitted to being involved in one previous motor vehicle accident¹⁷; in fact, he had been involved in two previous accidents, on June 11 and on July 27, 1995, and had made claims as a result of both.¹⁸

8. Mr. Nguyen did not disclose to the Insurer the fact that his step-daughter was in the vehicle in which he was allegedly injured on May 15, 1999;¹⁹ she also reported injuries.²⁰

9. Mr. Nguyen's wife was involved in the accident of June 11, 1995; she was a passenger in the other, again rented, vehicle²¹ and also made a claim as a result of this accident.²²

10. Mr. Nguyen consulted different doctors following each accident²³, not his family doctor.²⁴

The last five allegations were based primarily on the reports of a private investigation firm, Signum Corporate Services Inc., hired by the Insurer to "establish the similarities of Mr. Nguyen's previous claims with regard to the individuals involved, vehicles involved, injuries and any other comparison of evidence that is available".²⁵ Three Signum reports were filed at the hearing²⁶ and their author, Ms. Suzanne Fournier, testified. In addition, a Ms. Margaret Sottile produced and testified as to the contents of an insurer's "Accident Benefit file"²⁷ with respect to Mr. Nguyen's claim from the June 11, 1995 accident. Mr. Nguyen's Application for Accident Benefits following the accident on July 27, 1995 was also entered.²⁸

The evidence as noted supports the Insurer's last five allegations; indeed, there is simply no evidence to the contrary with respect to these allegations.

The evidence with respect to the first five allegations is not as one-sided. I examine it below under the following headings: the accident, the injuries, employment information and conduct at the interview.

(a) the accident

Both drivers completed and signed Self Reporting Collision Reports.²⁹ They gave similar, though not identical, descriptions of the accident and the driver of the other vehicle, a 1990 Ford one ton cube van, rented from U-Haul, confirmed the following damage: "front bumper scraped". I am not prepared to draw any inference from the fact that this minor damage was not reported to U-Haul.³⁰

The vehicle in which Mr. Nguyen was reported to be a passenger was a 1995 Dodge Neon four-door sedan. Photographs³¹ confirm damage along the length of the right side of this vehicle. The Insurer entered the written opinion of Wally Clark of Niagara Appraisal Services that these damages were:

...not consistent with a "side swipe" from the van passing the Dodge Neon as reported by Quoc-My Hang [the driver of the Dodge Neon].

The irregular shape of the scrapes on the Neon appear to be somewhat inconsistent with the shape of the front bumper of a 1990 Ford van, although, the right height of that bumper appears to be fairly consistent with the height of the damage on the automobile.

It would appear from the damages sustained on the Neon that some type of fender damage, at least at the left front corner of the van should have occurred, however, this was not reported in the notes report at the self reporting collision center.³²

However, earlier in his report, Mr. Clark had noted:

... the damage on the van was confined to the extreme left front corner with the police officer's estimate being $25 at the front bumper end, which was described as having been "scraped".

It is not clear to me why Mr. Clark did not regard this damage to the Ford van as damage to "the left front corner of the van", consistent with the type of damage he would have apparently expected in view of the damage to the Dodge Neon.

(b) the injuries

In an attempt to investigate the extent of Mr. Nguyen's alleged injuries, the Insurer set up Insurer's examinations.³³ Mr. Nguyen undertook, through his representative, to attend so long as a Vietnamese interpreter and transportation were provided.³⁴ Despite the Insurer's having apparently arranged for a translator and transportation, Mr. Nguyen did not attend these examinations and he was advised by the Insurer that his benefits would be stopped as a result.³⁵ The evidence indicates that Mr. Nguyen also failed to attend a Med/Rehab DAC appointment and that the Insurer again advised his representative that benefits were consequently not payable.³⁶

The evidence provides no indication why Mr. Nguyen did not attend the Med/Rehab DAC appointment. At the Insurer's interview, which was recorded and transcribed, Mr. Nguyen was asked to explain why he had not attended the Insurer examinations. He gave the following answers through an interpreter:

Q. Okay. You had an insured's examination scheduled for September 29th and you did not attend. Can you explain to me why you did not go?

A. September when?

A. 29th.

Q. Okay, the reason -- okay, the reason is that I don't have money, because I don't have money because I don't receive any compensation from since the accident. Okay, I've been involved in the accident since May.

Q. Okay. Why did you not go to the insured's examination?

A. Okay, so the reason is that I've been ill for a long period of time, and then I don't get any compensation benefits and I'm a patient and sick so I don't get any benefits, and I also mentioned with my legal representative telling me that it's been a long time and I don't get any compensation yet, so if I don't get compensation I -- the meaning is that I don't want to go because I don't get any compensation yet, and I also tell my rent that if they cannot help me to get compensation I will get back my file and not a legal right. Q. Is that the same reason why you didn't go to the functional evaluation set up for September 30th?

A. Yeah, okay, because I don't receive the letter to schedule for the appointment. I don't receive that letter and my lawyer also notify me that I don't receive that letter.³⁷

In my view, this evidence would be consistent with a finding that Mr. Nguyen was simply unaware that the Insurer had agreed to assume his transportation expenses.

Moreover, while Mr. Nguyen presented no evidence at the hearing to prove his injuries, the evidence presented by the Insurer at the hearing does not establish that Mr. Nguyen suffered no injuries as a result of the accident or that these injuries required no treatment or that these injuries were not disabling. As already mentioned, the only medical document entered into evidence was the letter to Mr. Farrell from Dr. Lorne Sokol quoted above.³⁸ Just as this letter does not constitute medical evidence that Mr. Nguyen was injured in the motor vehicle accident, nor does it constitute medical evidence that Mr. Nguyen was not injured in the motor vehicle accident.

Indeed, the Insurer did not attempt to establish that it did not receive any medical documentation confirming Mr. Nguyen's alleged injuries. One of the Explanation of Benefits forms³⁹ entered indicates that the Insurer paid for the preparation of a treatment plan and a doctor's certificate and suggests that the Insurer received at least one Disability Certificate. However, no Disability Certificate was entered into evidence before me. The evidence that was entered before me thus left open the possibility that Mr. Nguyen obtained medical documentation in support of his claims and that, while he did not present it at the hearing, he did present it to the Insurer.

(c) employment information

The evidence establishes that the Insurer sought to obtain more information about Mr. Nguyen's employment at the time of the accident⁴⁰, including a job site analysis⁴¹, than it ever obtained.

However, the evidence also establishes that the Insurer was able to obtain much pertinent employment information directly from the employer.

Mr. Nguyen's representative sent an Employer's Confirmation of Income form to the Insurer on September 2, 1999.⁴² It contained information about Mr. Nguyen's income in the four weeks prior to the accident, the employer's name, Sumac Renovations Inc., and the employer's address and telephone number. On September 20, 1999, the Insurer sent an Explanation of Benefits form⁴³ back to Mr. Nguyen indicating that he was "eligible" for this benefit, and the amount payable, subject to his supplying further information about the identity of the person who "actually completed" the Employer's Confirmation of Income form as well as his pay stubs and bank statements for the period April 12, 1999 to May 15, 1999.

In fact, the name of the person who signed the Employer's Confirmation of Income form was written in capital letters and was plainly legible as Sonny Yuen. In addition, on September 16, 1999, four days prior to the Insurer's request for further information from Mr. Nguyen, a private investigator engaged by the Insurer (not Signum) had confirmed that Kok Sun Yuen was the registered administrator of Sumac Renovations Inc.⁴⁴ On September 21, 1999, one day after the Insurer's request for further information from Mr. Nguyen, this same private investigator met with Mr. Yuen and made the following entry in his report to the Insurer:

Mr. Yuen contacted the investigator and stated that Mr. Nguyen worked for him from April 12, 1999, until May 15, 1999. Mr. Yuen advised his employment ended because of a motor vehicle accident and he had not worked for him since then. He had no record of his residency and when asked where he would mail his T-4 papers, Mr. Yuen stated his many employees contacted him at tax time to provide their current addresses. Mr. Yuen paid the subject an hourly wage of $12.00 which required a 48 hour a week work schedule. Mr. Yuen welcomed any further questions pertaining to Mr. Nguyen, if any should arise.⁴⁵

This evidence does not support Mr. Farrell's allegation that the employer was "reluctant to cooperate" with the Insurer's investigation of Mr. Nguyen's pre-accident employment.

(d) Mr. Nguyen's conduct during the interview

The transcript of the Insurer's interview on November 25, 1999 indicates that Mr. Nguyen first asked to be excused to get a drink of water and to go to the washroom about 25 minutes after the interview started.⁴⁶ He was gone for about five minutes.⁴⁷

The transcript also confirms that about twenty minutes later, Mr. Nguyen became upset and left the interview room and conferred with his representative, Mr. David Pham. He then came back and continued answering questions. At the point at which Mr. Nguyen became upset, he was being asked for the name of the company where he had been sent by his employer to do floor and drywall repairs. He gave a name but added that he was not sure. The following was then recorded by the reporter:

Q. So you don't know the name of the company you're working for?

A. Yeah, when I was working there I remember, but right now I don't. Okay, just one moment, please. I know the name of the company I work for before, right, but it's already been five or six months already, so I don't remember now, and I've been sick regarding about the accident so I feel so that's why I don't remember.

Q. How did you ---

A. Okay, so ---

Q. Please sit down, sir. Please sit down.

A. Okay, so ---

Q. Sit down. Excuse me. Excuse me. Please sit down. He's running out.

UNIDENTIFIED SPEAKER: What happened?

Q. I don't know.

THE INTERPRETER: He get upset and he just bang the door and then bang on the table.

He said that he's sick and he doesn't receive money from any money from compensation from the insurance company. I'm getting sick. I get the head back and I am almost 50 years. Right now I don't have any -- receive any compensation from the company, insurance company, and then you asked me too much and then something like that. That's all he said.

Q. And then he left?

THE INTERPRETER: And I get tired and I get upset and I don't want to answer any more questions, and then he just keep on saying I don't have to. I cannot keep up with what he is saying, but he get upset with the investigation, in a sense like that, and he doesn't want to answer any more questions.⁴⁸

Mr. Pham then came into the interview room and agreed to go and speak to his client. He came back and said the following:

MR. FAM [sic]: Yeah, I've spoken with my client and he is upset. He feels that he is being unfairly treated by the insurer. It's been more than six months since he was injured in this accident and he has not been paid anything at all.

He is coming back for the completion of the statement, but give him a few minutes to cool off.⁴⁹

This second interruption lasted about ten minutes.

I am not prepared to draw any adverse inference about the strength of Mr. Nguyen's claims from his conduct during this interview.

Analysis

In my view, an award under section 282(11.2) of the Insurance Act is only justified in this case if the evidence, taken as a whole, supports a finding that Mr. Nguyen's claims were fraudulent from the outset. Short of such a finding, the balance of the evidence does not establish that Mr. Nguyen was not involved in a motor vehicle accident on May 15, 1999, that he was not injured as a result, that he did not require treatment for these injuries or that he was not disabled from work. The fact that Mr. Nguyen failed to prove that these things did happen does not, of course, constitute proof that they did not happen. It is only if the Insurer proves fraud from the outset that the balance of the evidence is exposed as being nothing more than "part of a larger course of improper conduct tied to the commencement of the arbitration".

In his opening statement, Mr. Farrell described Mr. Nguyen's claims as "suspicious," but explicitly stopped short of describing them as fraudulent. In his written submissions, Mr. Farrell expressed the view that "a claim that was found to be fraudulent or a misrepresentation would indeed be found to be frivolous or even beyond frivolous"⁵⁰ (my emphasis) but he again stopped short of describing Mr. Nguyen's claims as fraudulent.

On the other hand, in his closing argument, Mr. Farrell referred to the involvement of Mr. Nguyen's wife and step-daughter in the June 11, 1995 and the May 15, 1999 accidents as "dispositive" proof that these were "contrived accidents". He further argued that the accident could not, in any event, have happened in the way it was described. Mr. Farrell went on to submit that Mr. Nguyen's consultation of different doctors after each accident "screams fraud". I, therefore, find that the Insurer alleged fraud in this case by maintaining that the accident of May 15, 1999 did not happen in the way described and by strongly suggesting that Mr. Nguyen was not injured as a result.

In the case of Continental Ins. Co. v. Dalton Cartage Co.⁵¹, Chief Justice Laskin observed:

Where there is an allegation of conduct that is morally blame-worthy or that could have a criminal or penal aspect and the allegation is made in civil litigation, the relevant burden of proof remains proof on a balance of probabilities.⁵²

However, Laskin C.J.C. also observed that the trier of fact should consider the cogency of the evidence and is entitled to scrutinize the evidence "with greater care if there are serious allegations to be established"⁵³. He then quoted with approval Lord Denning's words in the case of Bater v. Bater⁵⁴:

The case may be proved by a preponderance of probability, but there may be degrees of probability within that standard. The degree depends on the subject matter. A civil court, when considering a charge of fraud, will naturally require a higher standard of probability than that which it would require if considering whether negligence were established. It does not adopt so high a degree as a criminal court, even when it is considering a charge of a criminal nature, but still it does require a degree of probability which is commensurate with the occasion.⁵⁵

This law was most recently re-stated in the case of Vijeyekumar v. State Farm Mutual Automobile Insurance Co.⁵⁶ where the trial judge held that, like an allegation of fraud, an allegation of suicide attracts greater judicial scrutiny. On appeal, the Court of Appeal confirmed that the trial judge had "applied the proper standard and burden of proof".⁵⁷

In my view, the evidence in this case does not reach "the degree of probability which is commensurate" with proof, on a balance of probabilities, of the Insurer's allegation of fraud. I agree that there were good reasons to doubt the legitimacy of Mr. Nguyen's claims, namely, the involvement of his wife and step-daughter in two of the three accidents in which he was involved, his failure to disclose one of his prior accidents and his step-daughter's involvement in the May 15, 1999 accident, and his consultation of different doctors after each accident. However, to convert these doubts into proof of fraud from the outset, the Insurer needed more: it needed cogent evidence capable of proving its allegations that the accident of May 15, 1999 did not happen at all, that it did not happen in the way described or that Mr. Nguyen was not injured as a result. In the absence of such evidence, I reject its allegation of fraud and its claim for an award under section 282(11.2) of the Insurance Act.

EXPENSES:

In view of Mr. Nguyen's failure to appear at the hearing or to lead evidence, his claims were, at that stage, "manifestly unfounded" within the meaning of the Expense Regulation.

Mr. Nguyen's claim for expenses is, therefore, rejected and the Insurer's claim for expenses is allowed. Mr. Farrell requested that his client's expenses be fixed at $3,000 plus the cost of the reports it obtained from Signum Corporate Services. Inc.⁵⁸ I fix the Insurer's expenses at $4,776.02: $3,000 plus half of the cost of the Signum's reports. This latter reduction reflects my view that Signum's time billed (43 hours) and fees charged (between $50 and $60 per hour) were unreasonably high in relation to the nature and the amount of useful information it provided to the Insurer. Signum also claimed mileage at $.40 per kilometre whereas the rate allowed under section 6 of the Expense Regulation is only $.30 per kilometre.

May 10, 2001

David Leitch

Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 69

FSCO A00-000136

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

UNG VAN NGUYEN

Applicant

and

SCOTTISH & YORK INSURANCE COMPANY LIMITED

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Nguyen is not entitled to receive a weekly income replacement benefit for the period of May 2, 1999 to February 16, 2000, pursuant to section 4 of the Schedule.

2. Mr. Nguyen is not entitled to receive a medical benefit for acupuncture treatments performed at the Acupuncture Centre claimed pursuant to section 14 of the Schedule.

3. Mr. Nguyen is not entitled to receive a rehabilitation benefit for physiotherapy treatments incurred at DN Physiotherapy & Rehab Clinic Inc. claimed pursuant to section 15 of the Schedule.

4. Mr. Nguyen is not liable to pay Scottish & York an award under 282(11.2) of the Insurance Act.

5. Scottish &York is not liable to pay a special award pursuant to subsection 282(10) of the Insurance Act.

6. Scottish &York is not liable to pay Mr. Nguyen's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

7. Mr. Nguyen shall pay Scottish & York's expenses in respect of the arbitration which are fixed at $4,776.02.

May 10, 2001

David Leitch

Arbitrator

Date

Footnotes

1. 1The 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.
2. 2Exhibit 9.
3. 3Exhibit 10.
4. 4Exhibit 3.
5. 5Exhibit 11.
6. 6See Dhaliwal and Allstate Insurance Company of Canada (OIC A 97-000386, June 19, 1998)
7. 7Vieira and Commercial Union Assurance Company of Canada (A-009200, June 19, 1995); Gouliaeff (No.3) and Commercial Union Assurance Company of Canada (A-003996, July 24, 1995); Alessandro and General Accident Assurance Company of Canada (FSCO A96-001657, November 24, 1998); Imalele and Zurich Insurance Company (FSCO A98-000531, July 19, 1999); and Allison and Markel Insurance Company of Canada (Appeal P-001231, August 21, 1996).
8. 8Nguyen, H.T. and Kingsway General Insurance (FSCO A98-000673, January 21, 1999); Kha and State Farm Mutual Automobile Insurance Company (FSCO A97-001791, May 26, 1999)
9. 9the decision in the case of Imalele and Zurich, op. cit.
10. 10(OIC A97-001526, April 29, 1998)
11. 11Thambirajah and Zurich Insurance Company (OIC A97-001863, April 24, 1998)
12. 12Dhami and State Farm Mutual Automobile Insurance Company (FSCO A99-001175, Nov. 21, 2000)
13. 13Ibid., p. 8.
14. 14Exhibit 1(a).
15. 15Exhibit 1(q).
16. 16Exhibit 4, Tab 3, p. 5, Tab 7, p. last page, Tab 13, p. 3.
17. 17Exhibit 2, p. 11.
18. 18Exhibit 4, Tab 15, and Exhibit 8.
19. 19Exhibit 2, p. 13; Mr. Nguyen only stated that there were two other passengers in the vehicle: the driver's daughter and the driver's daughter's "friend".
20. 20Exhibit 4, Tab 12, p. 5.
21. 21Exhibit 4, Tab 12, p. 15.
22. 22Ms. Sottile's evidence.
23. 23Exhibit 1(a), Exhibit 15 and Exhibit 8.
24. 24Mr. Nguyen identified Dr. N. T. Tong as having been his family doctor since 1992; see Exhibit 2, p. 32-3.
25. 25Exhibit 4, Tab 11, p. 2.
26. 26Exhibit 4, Tabs 11, 12 and 13.
27. 27Exhibit 4, Tab 15.
28. 28Exhibit 8.
29. 29Exhibit 4, Tab 1.
30. 30Exhibit 5.
31. 31Exhibit 6, Exhibit 4, Tab 16.
32. 32Exhibit 4, Tab 16.
33. 33Exhibits 1(k), 1(n) and 1(o).
34. 34Exhibits 1(p) and 1(r).
35. 35Exhibit 1(s).
36. 36Exhibit 1(u).
37. 37Exhibit 2, pp. 33-34.
38. 38Exhibit 3.
39. 39Exhibit 1(d).
40. 40Exhibits 1(b), 1(c), 1(d), 1(g), 2 and 4, Tab 7.
41. 41Exhibits 1(h), 1(m) and 1(t).
42. 42Exhibit 1(e).
43. 43Exhibit 1(f).
44. 44Exhibit 4, Tab 7, p. 6.
45. 45Ibid.
46. 46Exhibit 2, p. 11-12.
47. 47Mr. Farrell agrees that the time noted on p. 12 should be 10:47 a.m., not 11:47 a.m.
48. 48Exhibit 2, p. 20-21.
49. 49Exhibit 2, p. 22.
50. 50Exhibit 11.
51. 511982 CanLII 13 (SCC), [1982] 1 S.C.R. 164.
52. 52Ibid., p. 169.
53. 53Ibid., p. 170.
54. 54[1950] 2 All E.R. 458 (C.A.).
55. 55Ibid., p. 459.
56. 56(1998) 1998 CanLII 14669 (ON CTGD), 38 O.R. (3d) 590 at p. 599.
57. 57(1999) 1999 CanLII 1640 (ON CA), 44 O.R. (3d) 545 at p. 548.
58. 58Exhibits 7(a), (b) and (c).