Neutral Citation: 2002 ONFSCDRS 148

FSCO-008445

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ABA M. ALAMIN

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA MARKEL INSURANCE COMPANY OF CANADA (TTC)

Insurers

INTERIM DECISION ON A MOTION

Before: John Wilson

Heard: September 13, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Anu Bakshi for the moving party, Moira Gracey.

Mr. Shakari, community volunteer, assisted Mrs. Alamin

Nestor E. Kostyniuk for Royal & SunAlliance Insurance Company of Canada

Michael Atlas for the Toronto Transit Commission

Issues:

This motion is an application, on behalf of Ms. Moira Gracey, counsel of record for Mrs. Alamin, to be removed as counsel of record.

The Applicant in the arbitration, Mrs. Aba M. Alamin, claimed to have been injured in two motor vehicle accidents— on March 21, 1993 and September 14, 1993. She applied for statutory accident benefits from Markel Insurance Company of Canada (TTC) and Royal & Sun Alliance Insurance Company of Canada. ("Royal"). Both Royal and Markel terminated weekly income benefits. The parties were unable to resolve their disputes through mediation, and Mrs. Alamin#33 applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The arbitration hearing was adjourned at various times to allow for changes of representation, the unavailability of the Applicant due to her involvement in other legal processes, and concerns over the capacity of the Applicant to proceed with this arbitration.

The ongoing difficulties in getting this case to the hearing stage arise principally from the latter reason.

The capacity question first arose as a distinct problem on September 19, 1997, when Mr. Bola Adetunji wrote to the Commission asking to be removed as solicitor of record in accordance with Mrs. Alamin's wishes. He also informed the Commission:

I have received the report of a psychiatrist in relation to Ms. Alamin. His opinion is that she is "incapable of advising counsel and incapable of following the proceedings of the hearing."

The current Rule 10 of the Dispute Resolution Practice Code (the Practice Code) sets out the Commission's practice with regard to parties under a disability. Subrule 10.2 states:

A minor, or a person who has been declared mentally incapable, within the meaning of Sections 6 or 45 of the Substitute Decisions Act 1992 (SDA) must commence a mediation or other proceeding through:

(a) the Public Guardian and Trustee or a court appointed guardian of the property under the provisions of the SDA; or

(b) an attorney under a valid continuing power of attorney that gives the attorney authority over all the property of the party;

Rule 10 of the Practice Code was not created to merely provide yet another road block to applicants. It reflects similar wording in Rule 7 of the Rules of Civil Procedure of the Ontario Courts, which, in turn, has drawn from the common law responsibility of the King's courts to protect those whose intellect has been impaired.

Although the Rules of Civil Procedure do not apply, as such, to administrative tribunals, some of the underlying law does. Subrule 7.08 of the civil Rules, makes it clear that the courts have a wide jurisdiction over persons under a disability, even to those who are not before the courts.

This authority, although listed in the Rules, derives from the parens patriae jurisdiction of the court. In law this jurisdiction may be traced to the statute 17 Edw. II which affirmed the obligation of the King to care for the persons and estates of "idiots and lunatics."

The archaic language of the common law decisions might strike the modern ear strangely. Words such as idiot and lunatic are no longer appropriate synonyms for those lacking capacity. However, the essence of the common law decisions remains valid.

The mandatory aspect of this jurisdiction is conveyed succinctly by Sugden L. C., in Re. Clare, 3 Jo. & Lat. 571:

If a party require protection, either for his person or his property, on the ground of imbecility of mind or lunacy, I am bound to give it to him, whatever be the demerits of the person applying for the commission... The jurisdiction is for the purpose of giving protection to the party.

The law is clear that this power is not restricted to "lunatics" so found, or persons found by a tribunal to be lacking the necessary capacity, but has effect over persons of "unsound mind" generally. As Lord Eldon stated in Gibson v. Jeyes, 6 Ves. 266:

It must be remembered that it is not necessary to establish lunacy; but it is sufficient that the person is incapable of managing his own affairs.

Sections 6 and 45 of the Substitute Decisions Act deal with the inability to manage one's own affairs. In essence, they codify the common law definition of capacity as it relates to the handling of property.

Section 6 states:

A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

The classic definitions of capacity arose usually in the specific context of testamentary capacity. In Banks v. Goodfellow (1870) L.R. 5 Q.B. 549, Cockburn, C.J. said:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right or prevent the exercise of his natural faculties — that no insane delusion shall influence his will in disposing of his property, and bring about a disposal of it which, if the mind had been sound, it would not have been made.

The SDA, itself does not define "property" but a common law definition of property would include "choses in action," such as litigation.

Likewise the ability to instruct counsel is dependent upon capacity. In the light of evidence of possible incapacity, a solicitor has an obligation to enquire into the capacity of his client. As Chancellor Boyd stated in Murphy v. Lampier (1914) 31 O.L.R. 287:

The solicitor may in some perfunctory way go far enough to satisfy himself as to capacity, but it is to be remembered that his duty is to go far enough to satisfy the Court that the steps he took were sufficient to warrant his satisfaction.

It is understandable that when Dr. Hoffman delivered his report on Mrs. Alamin's capacity, her solicitors began the process of having a litigation guardian appointed.

As well, as I noted in Piotto & Kingsway General Insurance Company (FSCO A00-001061, March 22, 2002), the law has long held that a solicitor who undertakes proceedings on behalf of an incapable person, without proper authorization, or the appointment of a litigation guardian may be held personally responsible for the costs of the proceedings.

Notwithstanding the correspondence suggesting that Mrs. Alamin had "fired" him as solicitor, Mr. Adetunji remained involved with the file, and participated in discussions regarding the appointment of a litigation guardian to act for Mrs. Alamin.

By December 1998, however, it is clear that his role was over, and that the Juan Carranza law office had undertaken to represent Mrs. Alamin. Correspondence from Ms. Frederika Rotter, then senior arbitrator at the Commission confirms that Mr. Carman Tiano of the Carranza firm was participating in discussions on behalf of Mrs. Alamin.

On April 15, 1999, Arbitrator McMahon wrote to Mr. Tiano:

When we last met, you had undertaken to apply to the court for the appointment of a litigation guardian. The time frame within which you were to report back has come and gone. Could you please update me on the progress of this matter.

There was apparently no response from Mr. Tiano, and on July 13, Mr. Kostyniuk, counsel for one of the Insurers wrote asking Mr. Tiano to "have the courtesy to advise us if you are still acting for Mrs. Alamin or not."

Mr. Tiano wrote on July 27, 1999 confirming "Yes we are acting for Mrs. Alamin with respect to the above-noted matter." The letter was signed "Juan F. Carranza Barristers & Solicitors".

On August 19, 1999, Senior Arbitrator Rotter once again wrote to Mr. Tiano regarding the application for a Litigation Guardian, and mentioned the lack of a response to her previous letter.

On March 7, 2001, the case administrator at the Commission wrote to Mr. Carranza:

We wrote to you on April 15, July 26, and August 19, 1999 ( copies of letters enclosed) regarding the above matter. We have not heard since from Mr. Tiano or anyone else regarding the above matter. We have on several occasions called to find out who is representing her since Mr. Tiano left your organization. We are now writing to find out if your firm is still representing Mrs,. Alamin, as she has recently called us to enquire about the status of her file.

On March 13, 2001 the Carranza firm wrote back to the Commission, confirming that it was still retained by Mrs. Alamin, and that Ms. Amina Sherazee would have carriage of her file. A further letter on April 3, 2002, advised that:

"We have medical evidence that indicates that Ms. Alamin will not be requiring a litigation guardian/power of attorney. We have enclosed a medical note prepared by Dr. Panjwani, her treating psychiatrist advising that Ms. Alamin is competent to instruct counsel.

The medical evidence referred to was a note on a prescription pad from Dr. Dilkhush Panjwani, dated March 29, 2001, which stated:

The above named patient is under my care. She is now competent to instruct counsel and make independent decision. She is fit to attend court.

It is important to consider that the doctor's note did not address whether Mrs. Alamin was able to meet the test of section 6. In light of the previous reports, Dr. Panjwani's note is not highly probative.

Ms. Sherazee, in her letter, did not ask that her firm be released from its undertaking to have a litigation guardian appointed.

I find that the undertaking by the Carranza law firm to obtain the appointment of a litigation guardian is still outstanding.

On September 27, 2001, The Carranza firm again wrote to the Commission, advising that Moira Gracey would be made available to handle a resumption of the pre-hearing. Moira Gracey, at the time, was an articling student, who worked under the supervision of Juan Carranza.

On November 28, 2001, a further pre-hearing was held, and a date for the hearing set. Arbitrator Renahan, at the pre-hearing , noted Mrs. Alamin's comments that the insurance company had tortured her a lot and that she "raised scandalous allegations of Royal's conduct, some eight years after the fact."

In the context of the pre-hearing, the arbitrator found that her allegations of conspiracy were not necessarily evidence of mental incapacity. There was, however, no medical evidence before the arbitrator, other than the short note reproduced above. The hearing was scheduled to commence on April 8, 2002.

On March 26, 2002, Ms. Gracey wrote to the Commission requesting that she be removed as solicitor of record, but giving no reasons. She did not enclose the consent of her client to her withdrawal.

On April 8, 2002 , counsel for all parties attended for the hearing. Mrs. Alamin attended, accompanied by Mr. Shakari, a community advisor, who was present to assist Mrs. Alamin in presenting her argument on the representation issue.

At the scheduled start of the hearing, Ms. Gracey repeated her request to be removed as counsel of record.

Ms. Gracey submitted that the solicitor-client relationship had broken down, and that she should be released from her obligations as solicitor of record.

Mrs. Alamin resisted this request, claiming significant prejudice if the matter was not to proceed to a hearing relatively soon, with her current counsel.

These two matters date from 1993, almost a decade ago. In the interim, at least two arbitrators have attempted to hear this matter, each adjourning due to concerns about the capacity of the Applicant to proceed. The record indeed contains assertions, both of capacity and incapacity by various sources, including physicians and psychiatrists.

Ms. Gracey, as noted, requested to be removed from the record pursuant to Rule 9.8 of the Practice Code.

Rule 9.8 provides:

Where the party represented provides written consent to the representative's request for withdrawal, the Registrar or an adjudicator shall permit the representative's withdrawal. Otherwise, an adjudicator may permit the representative to withdraw, subject to such terms as the adjudicator considers just.

There is no question that the proposed withdrawal is without the consent of the Applicant, and may only be permitted upon the exercise of the discretion of the arbitrator.

Rule 2.09 (1) of the Rules of Professional Conduct of the Law Society of Upper Canada provides that "a lawyer shall not withdraw from representation of a client except for good cause and upon notice to the client appropriate in the circumstances."

The Commentary on the Rule states:

Although the client has the right to terminate the lawyer-client relationship at will, the lawyer does not enjoy the same freedom of action. Having undertaken the representation of a client, the lawyer should complete the task as ably as possible unless there is a justifiable cause for terminating the relationship.

The commentary under Rule 2 (6) of the same Rules ( Client under a disability) concludes that:

"In any event, the lawyer has an ethical obligation to ensure that the client's interests are not abandoned."

The date of the request to be excused as counsel of record, less than two weeks prior to the hearing, in conjunction with the past suggestions of incapacity raised serious problems to the exercise of my discretion. Indeed, given the length of time the Carranza firm has represented Mrs. Alamin and the relatively late request to be excused from the file, Ms. Gracey could be seen to be abandoning a client's interests on the eve of arbitration.

Notwithstanding the presumption of capacity contained in Rule 10.1 of the Practice Code and section 2 of the Substitute Decisions Act 1992, there is sufficient evidence, on the record that, prima facie, may be sufficient to displace this presumption.

Given the previous allegations of incapacity in this matter, I refused to grant the requested order without some credible evidence that the alleged breakdown in the solicitor-client relationship was not due to, or related to the capacity issues, previously identified, and that the prejudice asserted by Mrs. Alamin can be addressed.

Ms. Gracey undertook to obtain medical evidence of Mrs. Alamin's capacity to instruct counsel, in support of her motion to be removed from the record.

Consequently, I adjourned the hearing of the motion to a date to be advised to permit Ms. Gracey to file her request in motion format as outlined in Rule 67 of the Practice Code.

Any notice of motion, and any supporting affidavits were to be served on Mrs. Alamin, counsel for the Insurers, and filed with the Commission at least seven days prior to the scheduled return date for the motion.

Nothing was heard from Ms. Gracey, or the Carranza firm for some months. On July 17, 2002, the case administrator again wrote asking Ms. Gracey to "please advise of your intent to file a motion to withdraw."

Finally, on September 10, 2002 Ms. Gracey filed a request to be removed as solicitor of record, which was set down for Friday, September 13. In support of this motion, Ms. Gracey filed her own affidavit. The notice of motion and supporting affidavit were served on Mrs. Alamin and the solicitors for the Insurers on the same week as the proposed hearing.

On September 13, Ms. Gracey appeared, represented by a colleague, Ms. Anu Bakshi. Mrs. Alamin was present, along with Mr. Shakari, as well as the solicitors for the Insurers.

Ms. Bakshi made submissions, relying on Ms. Gracey's affidavit, that the solicitor-client relationship had completely broken down. Ms. Bakshi attributed this breakdown largely to the participation of Mr. Shakari in any consultations with Mrs. Alamin. On the only occasion when Mrs. Alamin attended at the lawyer's office unaccompanied, "her state of agitation was such that I was unable to get those instructions."

In paragraph 23, Ms. Gracey stated:

Since September of 2001, I have met with Ms. Alamin on several occasions. It was clear to me that Ms. Alamin suffered from extreme anxiety and what as a lay-person, I would classify as paranoid, delusional behaviour, and she was often unable to discuss her case with me for some time at these meetings. However, after she became comfortable, her conversation became more rational, on each occasion I was able to discuss the case with her.

Notwithstanding Mrs. Alamin's agitation and difficulties, Ms. Gracey believed that "she appeared competent to instruct me."

An evaluation of capacity, however, is not a quick snapshot. An isolated instance of apparent comprehension in the midst of a sea of contradictory evidence is not highly probative. As Sir John Nicholl noted in Marsh v. Tyrell (1828), 2 Hagg Ecc. 84:

to suppose that because a person can understand a question put to him, and can give a rational answer to such a question, he is of perfect sound mind and is capable of making a will for any purpose whatever; whereas the rule of law; and it is the rule of common sense, is far otherwise: the competency of the mind must be judged by the nature of the act to be done, and from a consideration of all of the circumstances of the case.

I am not convinced that the observations made by Ms. Gracey in her affidavit necessarily support the conclusion that Mrs. Alamin has the necessary capacity to instruct counsel.

Notwithstanding her undertaking to produce medical evidence in the form of a report by Dr. Panjwani, Ms. Gracey neither filed such a report, nor produced Dr. Panjwani as a witness. Rather, she attached to her affidavit, copies of two letters. The first, dated April 9, requested a report. The second, dated August 13, followed up on that request.

Ms. Gracey stated that she did not attempt to contact Dr. Panjwani personally, nor did she consider serving him with a witness summons to require him to appear at the hearing. Nonetheless, she wishes to be excused from her undertaking, and to be dismissed as solicitor of record, over the objections of her client. I note that hers is not the only undertaking from the Carranza firm that is still outstanding.

This is an unusual case. In most circumstances an application to withdraw from the record is not opposed by an applicant. In this case it is.

The Carranza firm has been on this file for several years. It has been aware of the capacity issue since it first came on the record, and gave an undertaking to address it through the appointment of a litigation guardian.

The current Rule 4 of the Rules of Professional Conduct of the Law Society states at subrule 7:

A lawyer shall strictly and scrupulously carry out an undertaking given to the tribunal or to another lawyer in the course of litigation.

The Carranza firm's failure to act on its undertakings has meant that the case has stalled. No hearing has taken place, even though the incidents took place almost a decade ago. Under the circumstances, I accept that Mrs. Alamin felt prejudiced by the attempt to abandon her on the eve of the arbitration hearing. I also accept that there may have been prejudice to the Insurers in this matter, who have been unable to close their files once and for all.

Faced with the ongoing ambiguity on the question of capacity, Ms. Gracey's failure to abide by her undertaking to produce medical evidence, and the rushed manner in which this motion was brought forward, with short notice to all parties, I decline to exercise my discretion to release the Carranza law firm and Ms. Gracey as solicitor of record.

It is necessary to adjourn this matter again to permit the production of medical evidence on the capacity issue. Pending the receipt of such evidence clearly addressing the tests outlined in section 6 of the SDA, Ms. Gracey and the Carranza law firm shall remain as the solicitor of record in this matter.

EXPENSES:

Rule 75 of the Dispute Resolution Practice Code provides for the awards of expenses to a party in accordance with the criteria outlined in subrule 75.2. At the hearing, I noted that the need to adjourn this matter was due entirely to the failure of the moving party, Ms. Gracey, to fulfill her undertaking to this tribunal. Consequently she was warned of a potential expense order against her. The parties have agreed, however, to make any submissions as to expenses at the conclusion of her motion, now scheduled for November.

September 18, 2002

John Wilson Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 148

FSCO-008445

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ABA M. ALAMIN

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

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

1. Pending a final decision on a motion, duly served, in accordance with my order of April 8, 2002, and the undertaking given by Ms. Gracey at that time, Ms. Gracey and the Carranza law firm shall remain as solicitors of record in this matter.

September 18, 2002

John Wilson Arbitrator

Date