Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2003 ONFSCDRS 135 Appeal P03-00001

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MOIRA GRACEY AND JUAN CARRANZA Appellants

and

ABA M. ALAMIN Respondent

Before: Nancy Makepeace

Representatives: Moira Gracey and Juan Carranza, representing themselves Aba Alamin representing herself

Hearing Date: Written submissions completed August 1, 2003

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is allowed. The arbitration order of December 13, 2002 is revoked and replaced with the following order:

Moira Gracey, Juan Carranza and the Carranza firm are removed as solicitors of record.

2. The arbitration hearing may now proceed.

3. The parties shall bear their own appeal expenses.

September 11, 2003

Nancy Makepeace Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The Appellant, Moira Gracey, represented the Respondent, Mrs. Alamin, in an arbitration proceeding. Several weeks before the hearing was to start in April 2002, she moved to withdraw as solicitor of record. The Arbitrator refused, and twice adjourned the withdrawal motion pending receipt of further medical evidence of Mrs. Alamin's mental capacity.

The motion was finally heard on November 1, 2002. In a decision dated December 13, 2002, the Arbitrator made the following order:

The Carranza law firm is hereby removed as solicitor of record, subject to the conditions outlined in the body of this order, and the payment of the expenses fixed for the hearing adjourned on September 13, 2002.¹

The conditions were set out in the Arbitrator's reasons, as follows:

1. The Carranza law firm shall ensure that its documentary production obligations in this matter have been completed, subject to the co-operation of Ms. Alamin in providing any necessary authorizations.

2. The Carranza law firm shall make a duly qualified barrister and solicitor, familiar with the file, other than Ms. Gracey, available to appear as amicus curiae at any resumed pre-hearings and at the hearing in this matter, which is now scheduled for the spring of 2003. I note that there is no funding ordered for these appearances.

3. The Carranza law firm shall provide Ms. Alamin with a full copy of her file, and any supporting documents in its possession, together with a summary of the actions completed on this file and those remaining to be undertaken prior to a hearing.

4. Should Ms. Alamin be successful in retaining other counsel, or should the Carranza law firm conclude other arrangements with Ms. Alamin, it may move to be released from its obligations under this order.

5. The two matters shall continue to be heard together, but not combined into a single file.

6. The Carranza law firm shall continue to be served with all notices of hearing with regard to these matters, until such time as it is relieved of its obligations.²

Ms. Gracey appealed. Mr. Carranza also appealed: he submits that the "Carranza law firm" is not a legal entity, and refers to his own practice. The Appellants submit that in setting the conditions for their withdrawal, the Arbitrator exceeded his jurisdiction, erred in law, and erred in the exercise of his discretion. They ask me to revoke the conditions and substitute an order that they are removed from the record without conditions. The Insurers³ were given notice of this appeal, but elected not to respond. Mrs. Alamin's position is unclear. She appears to support the Arbitrator's order, but clearly feels the Carranza lawyers have not represented her well.

For the reasons below, I agree with the Appellants. They will be removed from the record without conditions. I make no order for appeal expenses because the Insurers did not participate in the appeal and neither they nor Mrs. Alamin caused the expenses to be incurred.

II. PRELIMINARY APPEAL ISSUES

The appeal raised a number of preliminary issues. In my letter of March 10, 2003, the text of which is appended to these reasons, I acknowledged the appeal from the Arbitrator's preliminary order, pursuant to Rule 51.2 of the Dispute Resolution Practice Code ("the Code"), ruled that Ms. Gracey and Mr. Carranza have standing to appeal, and stayed the arbitration pending the outcome of the appeal.

On May 8, 2003, I confirmed that the Insurers would have no further right to participate and would not be exposed to appeal expenses or assessments, since they did not file Responses to Appeal and indicated they did not wish to participate. I accepted Mrs. Alamin's typed submissions, faxed on May 2, 2003, as her Response to Appeal. In these submissions, Mrs. Alamin stated her intention to rely on her own affidavit and an affidavit from Mr. Sayyed Elsharakawi, a "community advisor" who has assisted her at various stages of the proceeding.⁴

These affidavits were not admitted into evidence before the Arbitrator. New (or "fresh") evidence is generally not admitted on appeal because the parties are expected to bring their best case to the arbitration hearing. This rule promotes the parties' confidence in the finality and certainty of arbitration decisions. However, appeals adjudicators have discretion to consider fresh evidence on appeal where it is just to do so, considering four factors: (i) whether the evidence was available, with due diligence, before the arbitration hearing; (ii) whether the evidence is reasonably capable of belief; (iii) whether the evidence is relevant and potentially decisive; and (iv) whether the evidence, considered together with the rest of the evidence admitted at the hearing, could reasonably be expected to have affected the result.⁵

On June 26, 2003, I dismissed Mrs. Alamin's motion to introduce fresh evidence by way of affidavits because there was no reason the evidence could not have been put before the Arbitrator. In any event, Mrs. Alamin's written materials so strongly support the Appellants' claim of a breakdown in the solicitor-client relationship that there was little chance the proffered evidence would have affected the outcome.

In my earlier letter, I had invited the parties' comments on my suggestion that the appeal should be decided based on written submissions, without an oral hearing, as permitted by s. 5.1 of the Statutory Powers Procedure Act⁶ and Rule 56.5 of the Code. This was agreeable to the Appellants. Mrs. Alamin did not respond. I concluded that oral submissions from the Appellants were not necessary, and Mrs. Alamin's oral submissions were unlikely to offer any additional arguments beyond those put forward in her written submissions. Moreover, as the Arbitrator observed, this proceeding has been much delayed, with ultimately no benefit to the parties. Finally, it was my view that the Arbitrator's order was plainly beyond his authority, and should be revoked expeditiously in order to minimize prejudice to the Appellants and Mrs. Alamin. Accordingly, I decided this matter based on the parties' written submissions alone, without an oral appeal hearing.

In response to the Appellants' Notice of Constitutional Question, the Ministry of the Attorney General gave notice that it might seek to intervene if a decision were to be made on a constitutional question. As I was able to decide the appeal without consideration of constitutional issues, I did not invite submissions from the Attorney General.

III. ANALYSIS

A. The Appellants' Conduct as Representatives

The Arbitrator's order was clearly influenced by his disapproval of the conduct of Mrs. Alamin's representatives. He found that "the Carranza firm," did not comply with its undertaking to have a litigation guardian appointed, that Ms. Gracey did not comply with her undertaking to produce medical and other documents relating to Mrs. Alamin's capacity, and that the firm "could be seen to be" abandoning its client on the eve of the hearing.

Recurrent and long-standing concerns about Mrs. Alamin's mental capacity are at the heart of all three issues. Mrs. Alamin has had difficulty instructing counsel. Her submissions and her letters to the Commission, at both the arbitration and appeal level, reflect her lack of understanding about litigation and the accident benefit scheme. There is no question she needs legal representation. However, I find the Arbitrator had little basis for his harsh criticism of Ms. Gracey.

Questions about Mrs. Alamin's capacity first arose in September 1997, when her former solicitor, Mr. Bola Adetunji, wrote to the Commission asking to be removed from the record. He indicated that a psychiatrist, Dr. Hoffman, had formed the opinion that Mrs. Alamin was "incapable of advising counsel and incapable of following the proceedings of the hearing."

In October 1997, the Office of the Public Guardian and Trustee (the "OPGT") advised that as Rule 7 of the Rules of Civil Procedure ("the Rules")⁷ has no application to Commission arbitration proceedings, the OPGT had no authority to act,⁸ and, in any event, Dr. Hoffman's opinion did not explicitly state that Mrs. Alamin was incapable, as defined under the Substitute Decisions Act, 1992, S.O. 1992, c. 30.⁹ Mrs. Foza Mahmoud agreed to act as litigation guardian, but only if she could be held immune from arbitration expenses. This was not acceptable to the Insurers. Mr. Adetunji terminated his retainer.

Mrs. Alamin then retained the Carranza firm. In late 1998, the parties met to discuss the question of Mrs. Alamin's capacity. On April 15, 1999, Arbitrator McMahon, acting as pre-hearing arbitrator, wrote the following to Mr. Carman Tiano, a lawyer with the Carranza firm:

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.

In response to follow-up enquiries from the Commission and Mr. Kostyniuk (who represents Royal), Mr. Tiano advised that the application for appointment of a litigation guardian was in process, and confirmed that the Carranza firm continued to represent Mrs. Alamin.

In March 2001, Ms. Amina Sherazee, another lawyer with the Carranza firm, took over the file when Mr. Tiano left the firm. The following month, she advised that Mrs. Alamin would not require a litigation guardian, based on the opinion of Dr. Dilkhush Panjwani, her treating psychiatrist. Dr. Panjwani had previously reported that Mrs. Alamin suffered from post-traumatic stress disorder, schizo-affective disorder and chronic pain disorder.¹⁰ He now stated a different opinion:

The above named patient is under my care. She is now competent to instruct counsel and make independent decision [sic]. She is fit to attend court.¹¹

Ms. Sherazee asked that the arbitration be resumed. Ms. Gracey, then an articling student with the Carranza firm, handled the resumption of the pre-hearing on November 28, 2001. Royal questioned Mrs. Alamin's capacity, but Arbitrator Renahan, relying on Dr. Panjwani's opinion, was not persuaded:

I do not find it unusual to hear an applicant complain of his or her insurer's conduct in strong language. It is somewhat unusual that an applicant accuse his or her insurer of conspiracy, however. Ms. Alamin was convicted of fraud on evidence that she received welfare and accident benefits at the same time and she served time in jail. In Ms. Alamin's situation, I do not find her allegations of conspiracy evidence of mental incapacity. All the evidence on Ms. Alamin's current capacity indicates that currently she has the mental capacity to proceed in this process.

A four-day hearing was scheduled to start on April 8, 2002.

On March 4, 2002, Ms. Gracey wrote to the Insurers and the Commission to advise that she no longer represented Mrs. Alamin. When contacted by the Commission's case administrator, Mrs. Alamin stated her wish that Ms. Gracey continue to represent her. The case administrator sent Ms. Gracey a copy of Rule 9 of the Code, which governs representation, and stated, "In the absence of written confirmation from Ms. Alamin to the contrary, you remain solicitor of record."

Ms. Gracey wrote again to the Commission on March 12, 2002, stating, "I am unable to continue to represent Ms. Alamin due to a breakdown of communications with my client and an irreconcilable disagreement about the appropriate way to present her case." Her letter concluded with a request: "I trust you will permit my withdrawal and look forward to hearing from you." She followed up with letters on March 18 and March 26, 2002, but it appears there was no response. On April 1, 2002, Mr. Wilgus (who represents the TTC) gave notice that he would request an adjournment of the hearing because of outstanding document productions. He stated, "It is my understanding that at least part of the reason these documents have not been produced is because Ms. Gracey cannot get instructions to do so." He anticipated that Ms. Gracey would consent to his adjournment request, because she had advised him that she intended to request her removal from the record, and, failing that, an adjournment.

Ms. Gracey repeated her request at the start of the hearing on April 8, 2002, again stating that the solicitor-client relationship had broken down. Mrs. Alamin resisted the request, claiming significant prejudice if she were not permitted to proceed with the hearing with Ms. Gracey's representation.

Arbitrator Wilson did not allow Ms. Gracey to withdraw.¹² He relied on Rule 9.8 of the Code, which states:

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.

Because Mrs. Alamin did not consent, the Arbitrator was required to exercise his discretion whether to allow the motion, with or without conditions, or refuse it. He refused, citing three factors: the timing of the request, the age of the proceeding, and concerns about Mrs. Alamin's capacity. With respect to timing, he stated that Ms. Gracey's request came "less than two weeks prior to the hearing," and "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."¹³ Further, the arbitration stemmed from events in 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."

Finally, despite Dr. Panjwani's second note, the Arbitrator found there was "sufficient evidence, on the record that, prima facie, may be sufficient to displace this presumption [of capacity]." The Arbitrator stated, "In light of the previous reports, Dr. Panjwani's note is not highly probative."¹⁴ He refused to allow Ms. Gracey off the record "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."¹⁵ He adjourned the motion, pending Ms. Gracey's undertaking to obtain medical evidence as to Mrs. Alamin's capacity.

In July 2002, with the undertaking still pending, the arbitration case administrator contacted Ms. Gracey to ask that she advise whether she still intended to withdraw. Ms. Gracey, now a lawyer with the Carranza firm, confirmed that she intended to withdraw, and explained that she had "unsuccessfully attempted to obtain" the medical evidence requested by the Arbitrator. However, she stated she was prepared to proceed with the motion without another report from Dr. Panjwani.¹⁶

A motion hearing was set for September 13, 2002. Ms. Gracey was represented by a colleague, Ms. Anu Bakshi. Mrs. Alamin was present, assisted by Mr. Elsharakawi. The Insurers were represented by counsel.

Dr. Panjwani had not responded to letters from Ms. Gracey's office dated April 9 (the same day Arbitrator Wilson made his order) and August 13, or telephone calls on June 4 and July 3, 2002. Ms. Gracey presented an affidavit describing her efforts to obtain the report ordered by Arbitrator Wilson and her reasons for the withdrawal motion. She felt Mrs. Alamin was competent to instruct her, but attributed the breakdown in the solicitor-client relationship to Mrs. Alamin's deferral to Mr. Elsharakawi and her sometimes agitated state, which prevented Ms. Gracey from obtaining instructions. She stated,

I have great sympathy and respect for Ms. Alamin and empathize with her need for vindication after she has suffered many wrongs. However, I strongly feel that there has been a complete breakdown of the solicitor-client relationship, both in our opinions as to how to best proceed and in the relationship of trust and confidentiality required for proper representation.

Appended to the affidavit was Ms. Gracey's letter to Mrs. Alamin, dated February 18, 2002, terminating the retainer (most of the text was blacked out to protect confidentiality). That letter was written almost two months before the April 8, 2002 hearing and seven months in advance of the September 13, 2002 hearing. It concluded with the following:

In order to give you time to find a new representative, I must stop representing you now.

I will be happy to provide you with a copy of your file to give to your new representative, or to send a copy to him or her directly at no charge. We will also pay for Dr. Panjwani's report should we ever receive it, and provide it to you. We will not charge you any fees for our services to date.

The affidavit states that Ms. Gracey gave Mrs. Alamin a copy of her file in April 2002, five months before the September 13, 2002 motion hearing.

The Arbitrator was not satisfied that Mrs. Alamin was capable. He criticized Ms. Gracey for not contacting Dr. Panjwani personally or summonsing him to appear at the hearing. The Notice of Hearing was dated September 6, 2002. Ms. Gracey claims that it was scheduled over her express objection that one week would not be enough time to properly serve materials and summonses.

The Arbitrator also found that the undertaking by the Carranza firm to have a litigation guardian appointed remained outstanding, and relied on Rule 4 of the Rules of Professional Conduct of the Law Society of Upper Canada, which states:

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

He adjourned the hearing again to allow production of medical evidence of capacity, and required Ms. Gracey and the Carranza firm to remain as solicitors of record in the meantime. He found that the adjournment 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 motion was resumed before Arbitrator Wilson on November 1, 2002.¹⁷ Mr. Carranza now appeared for Ms. Gracey, Mrs. Alamin was assisted by Mr. Elsharakawi, and the two Insurers appeared through counsel. Ms. Gracey called Dr. Panjwani to testify as to Mrs. Alamin's capacity. He testified that she satisfied the capacity test set out in s. 6 of the Substitute Decisions Act.

In his second decision, dated December 13, 2002, the Arbitrator described Dr. Panjwani's testimony:

Although Ms. Alamin had some problems in dealing with decisions, in his opinion, she clearly exhibited the capacity to understand the relevant information and analyse the elements of such decisions, as well as the ability to foresee consequences of her actions.¹⁸

The Arbitrator concluded, "it is clear from the evidence of her treating psychiatrist that she, at present, possesses the necessary capacity to make decisions, and to instruct counsel, and I so find."¹⁹ He also found, although on what evidence is not clear, "that any current difficulties in the solicitor-client relationship . . . are more likely attributable to differences in the background, cultural and life experiences of Ms. Alamin, than to any current intellectual incapacity on the part of Ms. Alamin."

Therefore, the Arbitrator concluded "[i]t is . . . Ms. Alamin's competent request that the Carranza law firm remain as her solicitors of record."²⁰ On the other hand, he accepted "that Ms. Gracey sincerely believes that there has been a loss of confidence between her and Ms. Alamin. Ms. Alamin has not denied that such is the state of the solicitor-client relationship. I note, however, that it is the Carranza law firm and not Ms. Gracey who is the solicitor of record in this matter."²¹

The Arbitrator concluded that he had no authority to order Ms. Gracey or the Carranza firm to continue to represent Mrs. Alamin. However, he accepted that Rule 9.8 of the Code allows an arbitrator to permit a representative to withdraw, "subject to such terms as the adjudicator considers just." In fashioning his award, the Arbitrator considered the firm's alleged delay in moving this matter forward, Ms. Alamin's lack of confidence in her ability to retain new counsel, the failure of the Carranza firm (in the Arbitrator's view) to satisfy its undertakings with respect to the appointment of a litigation guardian and with respect to document production.

An arbitrator's assessment of a representative's conduct of a hearing is deserving of considerable deference. However, in this case, I find that the Arbitrator erred in law and exercised his discretion unreasonably.

Contrary to the Arbitrator's statement that Ms. Gracey moved to withdraw less than two weeks before the scheduled start of the April 8 hearing, Ms. Gracey gave her first notice that she no longer represented Mrs. Alamin on March 4, two weeks after terminating the retainer and five weeks before the hearing. She made her first formal request to be removed on March 12, four weeks before the hearing. I do not accept that this was "an attempt to abandon [Mrs. Alamin] on the eve of the arbitration hearing."²² Although the withdrawal practically necessitated the adjournment of the April hearing, this was likely necessary, in any event, because of outstanding production issues. If the Arbitrator had allowed Ms. Gracey's withdrawal motion and adjourned the hearing, the five month period between the April and September hearings would have given Mrs. Alamin sufficient time to retain new counsel and complete the required productions. By the time of the September 13 hearing, seven months had passed since Ms. Gracey had terminated Mrs. Alamin's retainer. Any deficiencies in the amount of notice were surely cured by that time.

Nor do I accept that Ms. Gracey deserved criticism for the delay in bringing the matter forward again. Even if I disregard her claim that the September 13 motion hearing was scheduled under protest on one week's notice, any criticism of her lack of preparedness for that motion must be seen in context. After undertaking to obtain a report from Dr. Panjwani, Ms. Gracey wrote to him twice and phoned him twice. She could, perhaps, have been more aggressive in pursuing the report, but she was not contemptuous or neglectful. The Arbitrator's strong language ignored the fact that producing Dr. Panjwani's report was in the doctor's control, not Ms. Gracey's. Her failure to summons Dr. Panjwani is understandable given that there is no record anyone asked her to take that action.

The Arbitrator's ultimate acceptance of Dr. Panjwani's opinion that Mrs. Alamin was competent raises a question about his role in initiating this enquiry. Although arbitrators are mandated to control the hearing process to ensure a full and fair hearing, particularly where vulnerable parties are involved, caution is appropriate where a solicitor accepts that her client is capable, based on a report by the client's treating psychiatrist. At the very least, the Arbitrator, having adjourned the hearing in order to obtain additional evidence of capacity, should have been cautious about blaming counsel for the resulting delay.

The Arbitrator's ultimate acceptance of Mrs. Alamin's capacity also undermined his finding that the Carranza firm failed to satisfy its undertaking to have a litigation guardian appointed. Since Ms. Sherazee and Ms. Gracey took the position, based on Dr. Panjwani's report of March 29, 2001, that Mrs. Alamin was capable of instructing counsel, their decision not to secure the appointment of a litigation guardian is understandable. Ultimately, their view was vindicated by the Arbitrator. He criticised the Carranza lawyers for not asking to be released from the undertaking. In my view, that issue was implicitly at play in the September and December 2002 hearings, where the issue was whether Mrs. Alamin was capable of instructing counsel. In these circumstances, the breach of undertaking finding seems forced, at best.

I am aware of no authority for requiring counsel to bring "credible evidence that the alleged breakdown in the solicitor-client relationship was not due to, or related to the capacity issues previously identified, . . . "²³ In any event, the Arbitrator's order that the Carranza firm must continue to participate until Mrs. Alamin retains new counsel was fatally undermined by his ultimate acceptance of her capacity. That finding put her in the same position as any other insured person whose relationship with counsel has broken down. There is no question Mrs. Alamin has lost confidence in the Carranza lawyers. This is evident from her conduct, in seeking assistance from Mr. Elsharakawi, and from her own submissions – for example, her allegation that Ms. Gracey's affidavit contains false and misleading statements, and her allegation of "maneuvering by the law firm" to avoid being "implicated on the plot and execution of the staged criminal charges." The Arbitrator's ruling, which would effectively compel the Carranza firm to represent her without compensation, is unlikely to improve that relationship.

I find that the Arbitrator failed to consider the Appellants' legitimate interests and the full range of their professional obligations to their client, the other parties and the tribunal. As the Arbitrator recognized, Rule 2.09(1) of the Rules of Professional Conduct implies that a lawyer may withdraw "for good cause and upon notice to the client appropriate in the circumstances." This is clarified by Rule 2.09(2) ("Optional Withdrawal"), which states that a lawyer may withdraw "where there has been a serious loss of confidence between the lawyer and the client." The breakdown of the solicitor-client relationship is a valid reason for withdrawing, even if the client objects.²⁴

I have no doubt there has been such "a serious loss of confidence" between Mrs. Alamin and the Carranza lawyers that they can no longer represent her effectively. I find that Ms. Gracey has minimized prejudice to her client by giving notice that was adequate in the circumstances, providing a copy of the file and a letter summarizing the actions taken on the file, and waiving outstanding fees. In this case, the only proper exercise of the Arbitrator's discretion was to allow Ms. Gracey's motion to withdraw from the record without conditions.

B. Amicus Curiae

In any event, I find the Arbitrator had no authority to order the Carranza firm to provide a lawyer to act as amicus curiae.

The role of amicus curiae ("friend of the court") is one of the two main types of intervention known to the common law, the other being participation as an added party. In general, an added party has an interest in the proceeding, and presumptively assumes all the rights and liabilities of a full party. In contrast, a friend of the court remains a non-party, and represents a public interest not otherwise represented in the proceeding. The concept is a flexible one, and the role of amicus curiae has evolved to embrace four different functions – advising on a point of law, protecting the rights of unrepresented parties, preventing a substantial miscarriage of justice (for example, by informing the court of collusive or fraudulent suits), and protecting the public interest by presenting perspectives that would not otherwise be brought before the court.²⁵

While the last has assumed great importance in the Charter era, the Arbitrator's order calls to mind an older function – protecting the interests of an unrepresented party. This function has fallen into relative disuse with the greater availability of legal services and the creation of statutory regimes intended to protect the interests of vulnerable litigants. The most relevant of these, in the context of this appeal, is Rule 7 of the Rules of Civil Procedure, which requires that litigants under a disability be represented by a litigation guardian. In this case, the Arbitrator eventually accepted that Mrs. Alamin was competent and did not require a litigation guardian. Nevertheless, I have the impression his order was coloured by continuing concerns about her mental capacity and recognition of her need for legal representation.

Intervention rules are now codified in a number of special regimes. For example, Rule 13.01 of the Rules of Civil Procedure permits a non-party to move to intervene in a civil proceeding as an added party, and Rule 13.02 governs intervention as friend of the court:

13.01(1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.

13.02 Any person may, with leave of a judge or at the invitation of the presiding judge or master, and without becoming a party to the proceeding, intervene as a friend of the court for the purpose of rendering assistance to the court by way of argument. [emphasis added]

As the italicized words indicate, the participation of a friend of the court is generally limited to argument, and the amicus takes the record as it is. Generally, a friend of the court may not seek costs, but may be ordered to pay costs. For example, that was a condition for the order in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd., 1990 CanLII 6886 (ON CA), [1990] O.J. No. 1378 (Ont.C.A.), in which Dubin C.J.O granted the People for Sunday Association of Canada leave to intervene as a friend of the court in the appeal of the High Court decision striking down the Sunday closing provision of the Retail Business Holidays Act.²⁶ Chief Justice Dubin's restatement of the factors to be considered is often quoted:²⁷

Although much has been written as to the proper matters to be considered in determining whether an application for intervention should be granted, in the end, in my opinion, the matters to be considered are the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties.

The Rules of Civil Procedure do not apply in arbitration and appeal proceedings, and FSCO adjudicators do not have the residual inherent powers of the superior courts. We have only those powers that are granted by statute, expressly or by necessary implication.

The Insurance Act provides for interventions in appeals, authorizing the Director to "permit persons who are not parties to the appeal to make submissions on issues of law arising in an appeal."²⁸ The Act is silent on interventions in arbitration hearings. I do not need to decide whether such a power is implied because even if it is, the Arbitrator's use of it was inappropriate.

The reason for granting intervenor status in accident benefit proceedings is to ensure that important perspectives, beyond those of the parties, are presented to the adjudicator.²⁹ In contrast, the Arbitrator seems to have expected the amicus to fill the gap created by Ms. Gracey's departure:

In this matter, Ms. Alamin wants the Carranza firm to continue to represent her. I find that by appearing as amicus curiae, the Carranza law firm may both address the prejudice caused by past delays and Ms. Gracey's attempted withdrawal on the eve of a hearing, while avoiding the ethical dilemmas posed by a loss of confidence in the solicitor-client relationship.³⁰

The Appellants' role – or former role – as Mrs. Alamin's representatives, is inconsistent with the intervenor's role of providing "a wider perspective" than the one provided by the parties.³¹ In addition, the operative word in s. 283(8) is "permit." The Insurance Act does not authorize an arbitrator to order a solicitor to intervene without consent or compensation.³² The Arbitrator's order was plainly beyond his authority.

C. Arbitration Expenses

The Arbitrator also ordered, as a condition of removing the Carranza firm from the record, that they, as the "moving parties," pay the expenses of the September 13, 2002 hearing, fixed at $200 for each of the Insurers, and $50 for Mrs. Alamin. Since the Appellants are not insured persons, and there is no suggestion they commenced or pursued the arbitration without authority, they were not the "moving parties" in the main proceeding. At most, the Arbitrator found that they, as representatives, had caused delay by failing to satisfy undertakings.

A related issue arose in Volfson and Olga Shuster and Yury Shuster and Royal & SunAlliance Insurance Company, (FSCO P02-00028, August 7, 2003). In that case, the Arbitrator found that Roman Volfson, a paralegal associated with a treatment facility, commenced an arbitration proceeding without the authority of the insured persons, Olga and Yury Shuster. The Arbitrator found that by engaging the Commission's process, Mr. Volfson became a de facto party, and she amended the style of cause accordingly, identifying him as the Applicant. Mr. Volfson appealed her order that he pay the arbitration expenses of the Shusters and Royal.

I allowed the appeal. Unlike the Rules of Civil Procedure, which authorizes a court to order costs against a solicitor who commences a civil proceeding without authority (Rule 15.02(4)), and authorizes a costs award against a solicitor who "caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default" (Rule 57.07), s. 282(11) of the Insurance Act only authorizes expenses orders between insurers and insured persons who are parties to arbitration and appeal proceedings. FSCO adjudicators do not have power to make an expenses order against a representative or other non-party, or to add a representative as a party for the purpose of making an expenses order against him. I reaffirmed the principle, set out in Adusei and Royal Insurance Company of Canada, (OIC A-004404, March 3, 1994), that a treatment facility does not have standing to commence proceedings in its own name, or in the name of the insured person by way of subrogation, assignment or authorization, because s. 281(1) allows only insured persons to commence arbitration:

It is tempting to say there is an exception to that rule when a person other than an insured person or an insurer wrongfully engages the Commission's process, but this just makes it clear that the reason for joining Mr. Volfson is to order him to pay the other parties' arbitration expenses. This would allow an arbitrator to do indirectly what she cannot do directly – make an expenses order against someone other than an insured person or an insurer. I am not persuaded this is permitted under the Insurance Act or the SPPA. [at p. 14]

Although Ms. Gracey commenced a withdrawal motion, neither she nor Mr. Carranza commenced an arbitration as insured persons, and they could not have done so. Nor could they be added as parties to the proceeding. They were representatives, and the Arbitrator's authority to order them to pay the expenses of Mrs. Alamin and the Insurers depended entirely on his having power to make an expenses award against a representative. Since it is settled law he did not have that power, he could not acquire it by treating them as party applicants or intervenors. In this respect, he exceeded his authority and erred in law.

D. Conclusion

For the reasons given, the arbitration order will be revoked, and Ms. Gracey will be removed from the record without conditions. To the extent the Arbitrator's order was effective against Mr. Carranza or "the Carranza firm," it will also be revoked. The arbitration hearing may now procced. Unfortunately, this means Mrs. Alamin is unrepresented.

On August 5, 2003, after the deadline for written submissions, I received a package of documents from Mrs. Alamin that included letters from counsel discussing the merits of her claim, including an unexpurgated copy of Ms. Gracey's February 18, 2002 letter in which she terminated her retainer. I have sealed the entire package, which means it does not form part of the appeal record.

IV. EXPENSES

Although Ms. Gracey and Mr. Carranza have been entirely successful in their appeal, there will be no expenses order. As the Insurers elected not to respond to this appeal, I have no authority to make an expenses order against them, and it would be inappropriate to do so, since they were not responsible for any of the problems in this case. Nor can Mrs. Alamin be blamed for her conduct of the matter. Subsection 282(11) authorizes an award of expenses to the insurer or the insured person. It does not authorize an expenses award in favour of representatives personally. Nor does it authorize an order that a representative pay any other party's expenses. However, these are likely to be minimal given my disposition of the matter on the basis of written submissions alone.

September 11, 2003

Nancy Makepeace Director’s Delegate

Date

APPENDIX: Letter of March 10, 2003

In addition to the written submissions received from Ms. Gracey and Mr. Carranza (the Appellants), dated January 17, 2003, I have now reviewed submissions from Mr. Kostyniuk, on behalf of Royal & SunAlliance, dated January 24, 2003, and Mr. Wilgus, on behalf of the TTC, dated February 10, 2003. I have also received a letter, dated March 7, 2003, from Mr. Batty, Counsel for the Ministry of the Attorney General.

Ms. Gracey and Mr. Carranza submit that the Arbitrator's ruling was a final order appealable as of right on a question of law, or, alternatively, if it was a preliminary order, the appeal should be acknowledged on a discretionary basis. The Appellants submit that they have standing to appeal the order because the Arbitrator added them as parties to the arbitration. They request that all further arbitration proceedings be stayed pending the outcome of the appeal.

The Respondent, Mrs. Alamin, has not provided submissions. On March 6, 2003, she faxed a letter (enclosed), stating: "I could not get Mr. Sharakawy he is busy with his court case. If you will kindly go ahead with the decision fo [sic] the next step." I understand this to mean that Mrs. Alamin will not make submissions at this time.

The Insurer Respondents take no position on the merits of the appeal as between the Appellants and Mrs. Alamin. They submit, however, that they should not be prejudiced because of this dispute by way of interest, appeal expenses, appeal filing fees or assessment fees. Nor should Mrs. Alamin be entitled to a new hearing with respect to her benefit claim as a result of the appeal.

The Ministry of the Attorney General wishes to provide submissions on the Charter issues if the appeal is acknowledged.

My decision on the preliminary issues is as follows:

1. The appeal is acknowledged.

Rule 50.2 of the Dispute Resolution Practice Code states, "A party may not appeal a preliminary or interim order of an arbitrator until all of the issues in the arbitration have been finally decided, unless the Director orders otherwise."

As the Arbitrator's decision of December 13, 2002 does not finally dispose of any issue between Mrs. Alamin and the Insurers, Rule 50.2 applies.

However, this does not decide the matter, because an appeals adjudicator has discretion to acknowledge an appeal from an interim or preliminary order. I reviewed the underlying principles in Torok and Allstate Insurance Company of Canada, (FSCO P01-00021, May 29, 2001):

The purpose of [Rule 50.2] is to facilitate the most cost-effective resolution of disputes by minimizing the time and money spent on procedural or collateral matters. The decision whether to hear an appeal of a preliminary order is discretionary. As Delegate Naylor stated in General Accident and Glynn, the over-arching principle guiding the exercise of the discretion is that the rule "should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute."³³ The criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether rejecting the appeal or hearing it will prejudice either party.³⁴

Neither the Insurance Act nor the Statutory Powers Procedure Act includes any express authority for a tribunal to compel counsel to act as amicus curiae (friend of the court). Although Rule 59 of the Dispute Resolution Practice Code authorizes the granting of intervenor status, it does not, on its face, appear to contemplate the order made in this case. The Arbitrator's ruling is novel, as far as I know. Based on the limited materials available to me at this point, the appeal deserves to be heard.

Moreover, as I stated in my earlier letter, the Arbitrator's order that the Carranza firm pay the expenses of Mrs. Alamin and both Insurers in relation to the hearing of September 13, 2002, is contrary to the weight of the Commission's case-law.

The Appellants have raised important and novel questions of law that could potentially affect many claims. These are compelling reasons to acknowledge the appeal.

On behalf of Royal & SunAlliance, Mr. Kostyniuk suggests two alternative remedies: judicial review or moving before the Arbitrator to be removed from the record. I am not convinced the latter is a realistic option, given that the Arbitrator's terms contemplate removing the Carranza firm only in the event Mrs. Alamin agrees or retains other counsel. Applicants for judicial review are generally expected to exhaust internal appeals before commencing judicial review proceedings. In any event, for the reasons given, I am persuaded an appeal lies from the Arbitrator's order.

2. Ms. Gracey and Mr. Carranza are parties to the appeal.

Under s. 282(1) of the Act, "[a]n insured person" may commence arbitration. Subsection 283(1) of the Insurance Act states, "[a] party to an arbitration . . . may appeal the order of the arbitrator. on a question of law." Pursuant to s. 5 of the Statutory Powers Procedure Act, "[t]he parties to a proceeding shall be the persons specified as parties by or under the statute under which the proceeding arises, or, if not so specified, persons entitled by law to be parties to the proceeding."

The Arbitrator ordered the Carranza firm to pay the arbitration expenses incurred by Mrs. Alamin and the Insurers in relation to the hearing on September 13, 2002. In effect, he added Mrs. Alamin's representatives as parties to the arbitration proceeding. (In his reasons, at p. 15, he refers to them as "the moving parties.") In my view, justice requires that they be given an opportunity to appeal that order, in which they have a direct financial interest.

3. Stay and Appeal Costs

As the preliminary issue appeal concerns Mrs. Alamin's relationship with the Carranza firm, not the Insurers, it would be understandable if the Insurers decided not to participate. If the Insurers choose not to file Responses to Appeal, they will be released from any potential liability for appeal filing fees, assessments or appeal expenses. Mr. Kostyniuk goes further, and submits that the Insurers should not be prejudiced by way of additional interest on overdue benefits as a result of this appeal, and that Mrs. Alamin should not later be granted a new hearing.

In my letter of January 24, 2003, I granted the Appellant's stay motion, pending my decision about whether to allow the appeal to proceed. Given my decision to acknowledge the appeal, that order is now confirmed. For administrative purposes only, we will keep the arbitration hearing dates (May 5-8, 2003) open for the time being, though it seems unlikely the appeal will be completed by then. For clarity, the arbitration hearing will not proceed until the preliminary issue appeal is decided. That avoids the need to consider ordering a rehearing of the arbitration hearing on the merits, which I gather is Mr. Kostyniuk's concern.

As for interest on overdue benefits, the Commission's decisions have generally held that interest is payable from the date benefits become overdue to the date they are paid, whatever the reasons for the delay. However, since I will not be dealing with benefit entitlement issues in this preliminary issue appeal, I will not be making any orders with respect to interest. This will be a matter for the Arbitrator who hears the entitlement case after disposition of this preliminary issue appeal.

That being said, if the Insurers choose to respond to the appeal, I am not aware that I have authority to release them from the obligation to pay appeal filing fees or assessments. I will, of course, be prepared to hear their submissions about this, and about appeal expenses under s. 282(11) of the Insurance Act.

As between Mrs. Alamin and her former counsel, I am satisfied that hearing the appeal now, rather than waiting for the Arbitrator's final decision, will tend to minimize costs and delays.

4. Next Steps

Accordingly, my orders are as follows:

1. The appeal is acknowledged.

2. Ms. Gracey and Mr. Carranza have standing to appeal the Arbitrator's order.

3. The Arbitrator's order is stayed pending the outcome of this appeal.

Mrs. Alamin and the Insurers should give their Responses to Appeal within 20 days of receiving this letter, in accordance with Rule 53. I would ask them to give notice, within the response period, if they decide not to participate in the preliminary issue appeal.

After the Responses to Appeal are received, I will invite the parties to provide written submissions on all the issues raised in the preliminary issue appeal. Mr. Batty, you will be invited to provide your submissions on the Charter issues at that time.

Although it is generally our practice to schedule an appeal hearing to hear the parties' oral submissions once written submissions are completed, it may be appropriate, in this case, to decide the issues based on written submissions alone. I invite the parties' comments on this point.

Mrs. Alamin, I strongly encourage you to retain a lawyer to represent you in this appeal. The appeal raises rather technical issues, and its outcome will determine the role, if any, the Carranza firm will play in the arbitration hearing about your benefit claim.

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.

Footnotes

1. 1Alamin and Royal & SunAlliance Insurance Company of Canada and The TTC (Markel Insurance Company of Canada), (FSCO A-008445 and A-008446, December 13, 2002).
2. 2Arbitration decision, p. 14.
3. 3Markel Insurance Company of Canada (TTC) is the Insurer responsible for any benefits to which Mrs. Alamin is entitled in relation to the accident of March 21, 1993. Royal and SunAlliance Insurance Company of Canada is the Insurer in relation to the accident of September 14, 1993.
4. 4Various spellings have been given for Mr. Elsharakawi's name. At several points in the appeal process, Mrs. Alamin has indicated she wished Mr. Elsharakawi to represent her. However, I received no response to my request for written confirmation as required by Rule 9 of the Code.
5. 5These principles were affirmed in R. v. Palmer, 1979 CanLII 8 (SCC), [1980] 1 S.C.R. 759 and R. v. Stolar, 1988 CanLII 65 (SCC), [1988] 1 S.C.R. 480. They have been applied in the civil context as well; for example, Public School Boards' Assn. Of Alberta v. Alberta (Attorney General), 2000 SCC 2, [2000] 1 S.C.R. 44. The leading Commission decision is Plows and Jevco Insurance Company, (FSCO P-000175, P-000588, May 22, 1992), which has been followed consistently in numerous subsequent appeal decisions.
6. 6R.S.O. 1990, C.S.22, as amended.
7. 7R.R.O. 1990, Regulation 194, as amended, made under the Courts of Justice Act, R.S.O. 1990, c.43, as amended.
8. 8The issue is now dealt with in Rule 10 of the Fourth Edition of the Code, which took effect on May 31, 2001.
9. 9Section 6 of the Substitute Decisions Act defines incapacity as follows:
10. 10October 17, 2000 (handwritten note on a prescription pad).
11. 11March 29, 2001 (handwritten note on a prescription pad).
12. 12His order and reasons were initially given by letter, dated April 9, 2002, and later released in decision format (the first arbitration decision) as Alamin and Royal & SunAlliance Insurance Company of Canada and The TTC (Markel Insurance Company of Canada), (FSCO A-008445 and A-008446, September 18, 2002).
13. 13First arbitration decision, p. 9.
14. 14Ibid., p. 6.
15. 15Ibid., p. 9.
16. 16Ms. Gracey's letter of July 18, 2002.
17. 17The Commission's records confirm the Appellants' contention that the October 15, 2002 date indicated on the decision is in error.
18. 18Second arbitration decision, p. 4
19. 19Ibid., p. 5.
20. 20Ibid., p. 6.
21. 21Ibid., p. 10.
22. 22First arbitration decision, p. 12.
23. 23First arbitration decision, p. 9.
24. 24For example, see Tatar v. Kusch, (1994) 93 B.C.L.R. (2d) 100 (B.C.S.C.), Dobranski v. Dobranski, [1994] B.C.J. No. 1475 (B.C.S.C.), Nicolardi v. Daley, [2003] O.J. No. 1303 (Ont.S.C.J.).
25. 25See Law of Intervention: Status and Practice, Paul R. Muldoon, (Aurora: Canada Law Book, 1989).
26. 26See also, for example, Perry v. Ontario, [1996] O.J. No. 2546 and Power Workers' Union v. Lincoln Hydro Electric Commission, [1996] O.J. No. 2671, as well as the decisions cited in the next note.
27. 27For example, in Halpern v. Canada (Attorney General), [2003] O.J. No. 720 and [2003] O.J. No. 730, in which (respectively) Chief Justice McMurtry granted the Canadian Human Rights Commission and the Canadian Coalition of Liberal Rabbis for Same-Sex Marriage leave to intervene in the same-sex marriage appeal.
28. 28Subsection 283(8) of the Insurance Act.
29. 29Vo and Maplex General Insurance Company, (OIC P-002777, March 11, 1994) and Persofsky and Liberty Mutual Insurance Company, (FSCO P00-00041, November 21, 2001).
30. 30Second arbitration decision, p. 15.
31. 31Although, see R. v. Samra, 1998 CanLII 7174 (ON CA), [1998] O.J. No. 3755 (Ont.C.A.), the accused, Samra, was charged in connection with the Oscar Fonseca courthouse shooting, his lawyer, Black, successfully moved to withdraw when it became clear the accused intended to conduct most of the trial himself. At the Crown's suggestion, the trial judge appointed Black to act as amicus curiae. Samra initially consented, but later moved to have Black discharged on the basis that he took positions that did not support his own. The trial judge refused, noting the different roles of advocate and amicus, and finding there was no actual or potential conflict of interest. This was upheld on appeal. Justice Rosenberg, who wrote for the panel, stated "the mere fact that Mr. Black had previously been retained by the appellant in this matter did not preclude his appointment as amicus curiae." For purposes of the instant appeal, the important point is that Mr. Black consented to the appointment, and was presumably paid for his services.
32. 32Similarly, Rule 59 of the Code, which sets out the procedure for intervention applications, authorizes the Director or Delegate to "request" a non-party to make submissions on a question of law, and allows non-parties to apply for intervenor status. It does not give the Director or Delegate power to order a party to intervene against his or her will.
33. 33The "over-arching principle" is found in Rule 1.1 of the Code. Glynn and General Accident Assurance Company, (OIC P96-00085, March 17, 1997).[footnote in original]
34. 34The principles have been considered in a number of appeal decisions. See, for example, Tesfay and Allstate Insurance Company of Canada, (FSCO P99-00023, June 21, 1999), Ms. Z. and Dominion of Canada General InsuranceCompany, (FSCO P98-00053, December 11, 1998), Glynn and General Accident (above), and Christo and Royal Insurance Company of Canada, (OIC P96-00049, September 11, 1996). [footnote in original]