Neutral Citation: 2003 ONFSCDRS 146

FSCO A03-000765

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JERZY OLSZEWSKI

Applicant

and

CITADEL GENERAL ASSURANCE COMPANY

Insurer

INTERIM DECISION ON A PRELIMINARY ISSUE

Before:

John Wilson

Heard:

July 30, 2003, by teleconference

Appearances:

Philip B. Morrissey for Mr. Olszewski

James E. Dunn for Citadel General Assurance Company

Issues:

The Applicant, Jerzy Olszewski, was injured in a motor vehicle accident on November 27, 1990. He applied for and received statutory accident benefits from Citadel General Assurance Company ("Citadel"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Olszewski applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Is Mr. Olszewski precluded by res judicata or issue estoppel from proceeding to arbitration because the claim put forward in this arbitration application was the subject of a previous arbitration and appeal proceeding?

Result:

Mr. Olszewski is not necessarily barred from proceeding and the parties may proceed, if so advised, to make further submissions on the issues of the application of the Smith v. Co-operators decision in regards to the refusal of Citadel to pay further benefits and the application of Rule 61 of the Practice Code to this proceeding.

EVIDENCE AND ANALYSIS:

This preliminary issue arises from the request of Mr. Olszewski to arbitrate a dispute with his Insurer, Citadel, relating to an accident suffered on November 27, 1990 - a dispute that has already been the subject of both an arbitration and an appeal proceeding at the Commission.

In the previous application to the Commission, the arbitrator found that Mr. Olszewski was statute-barred from proceeding to arbitration by reason of his failure to apply for mediation and arbitration within the time-limits set out under the OMPP legislation. This finding was upheld upon appeal.

Following the release of the decision of the Supreme Court of Canada in Smith v. Co-operators, (2002 SCC 30, 2002 S.C.C. 30) Mr. Olszewski felt that the 1997 decision to bar him from arbitration was incorrect, and applied, once again, for arbitration.

The majority of the court in Smith found that there was a positive obligation on an insurer to fully comply with the refusal provisions of the Statutory Accident Benefits Schedule before terminating benefits. It found, as well that in the absence of full compliance by the Insurer, there is no valid refusal and the time-limits under the Insurance Act and the Schedule do not begin to run.

Mr. Olszewski believes that, in light of Smith, there could have been no proper refusal of benefits, and consequently no reason to be barred from an arbitration on the merits of his case.

Needless to say, Citadel resists Mr. Olszewski's attempt to bring this matter to arbitration again, since:

Mr. Olszewski's entitlement to weekly income benefits, post-156 weeks, has already been conclusively determined by Arbitrator Joyce Miller (on November 28, 1997) and by Director's Delegate David R. Draper on appeal (on November 16, 1998). Accordingly, the present Application for Arbitration should be stayed or dismissed on the basis of res judicata. (letter dated July 25, 2003 from counsel for the Insurer to the Commission)

The doctrine of res judicata has been defined by Sopinka and Lederman (The Law of Evidence in Canada, Sopinka, Lederman and Bryant, Butterworths, Toronto 1999, p.1068) as follows:

The modern rule of estoppel by res judicata is grounded upon two broad principles of public policy; first that the state has an interest that there should be an end to litigation (interest republicae ut sit finis litum) and, secondly, that no individual should be sued more than once for the same offence (nemo debet bis puniri pro uno et codera delicto).

In the eyes of these same authors:

Although the principle of res judicata is sometimes referred to as a rule of substantive law, the better view is that it is a rule of evidence. Essentially, the party against whom the suit or issue was decided is estopped from proffering evidence to contradict that result.

Closely allied to res judicata is issue estoppel, which applies only to parties and their privies.

The classic Canadian definition of issue estoppel was made by Middleton J. A., in McIntosh v. Parent 1924 CanLII 401 (ON SCAD), [1924] 4 D.L.R. 420 at p. 422:

When a question is litigated, the judgement of the Court is a final determination as between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a Court of competent jurisdiction as a ground for recovery, or as an answer to a claim set up, cannot be re-tried in a subsequent suit between the same parties or their privies, though for a different cause of action. The right question, or fact, once determined, must, as between them, be taken to be conclusively established so long as the judgement remains.²

Citadel pleads issue estoppel in the alternative as a bar to Mr. Olszewski's arbitration proceeding.

There is no question that on January 29, 1996, Mr. Olszewski filed an application for mediation with the Commission relating to "weekly benefits for both Jerzy Olszewski and Danuta Olszewski post 156 weeks." This application for mediation formed the basis of the subsequent Application for Arbitration and, ultimately, the preliminary issue hearing that took place before Arbitrator Miller on September 22, 1997 in London, Ontario.

Arbitrator Miller, in her decision, dated November 28, 1997, defined the issue before her as whether "Mr. and Mrs. Olszewski (are) precluded from proceeding to arbitration pursuant to section 281(5) of the Insurance Act." She found that they were statute-barred from proceeding.

The Application for Mediation in this current matter, dated January 20, 2003, also listed income benefits past 156 weeks as being in issue, together with interest and the calculation of a cost of living adjustment on the income benefit.

On the face of the record, it would appear that there is some merit in the Insurer's argument that the issues raised in this arbitration were the subject of a previous arbitration.

Such an appearance, however, does not necessarily mean that Mr. Olszewski is automatically barred from re-visiting his dispute with Citadel. As Sopinka et al. noted, res judicata is not a rule of law, but merely a rule of evidence that estoppes a party from proffering evidence in a proceeding that would fly in the face of a previous judicial decision on the same facts and issue.

Even if the prerequisites for issue estoppel or res judicata are met, there is some discretion about whether or not to strictly apply the rules. As Binnie J. noted in Danyluk v. Ainsworth Technologies (supra):

I agree that in general issue estoppel is available to preclude an unsuccessful party from re-litigating in the courts what has already been successfully litigated before an administrative tribunal, but in my view this was not a proper case for its application. A judicial doctrine developed to serve the ends of justice should not be applied mechanically to work an injustice.

Accordingly, there are exceptions to both rules, which arise when other policy considerations conflict with the presumption in favour of certainty, of finis litum.

Exceptions may occur if there are new facts or circumstances that were unknown to the parties at the time of the original decision. In Arnold v. National Westminster Bank plc ([1991] 2 A.C. 93, p. 110) the House of Lords adopted the words of Browne-Wilkinson V.C. of the Chancery Division in stating:

In my judgement a change in the law subsequent to the first decision is capable of bringing the case within the exception to issue estoppel. If, as I think, the yardstick of whether issue estoppel can be held to apply is the justice to the parties, injustice can flow as much from a subsequent change in the law as from a subsequent discovery of new facts. In both cases the injustice lies in a successful party to the first action being held to have rights which in fact he does not possess. I can therefore see no reason for holding that a subsequent change in the law can never be sufficient to bring the case within the exception. Whether or not such a change does or does not bring the case within the exception must depend on the exact circumstances of each case.

This approach has been specifically adopted in Ontario by the Court of Appeal in Robb v. St. Joseph Health Care (2001) O.J. No. 606, and cited by Laskin J. A in Minott v O Shanter Development Co. (1999) 1999 CanLII 3686 (ON CA), 42 O.R. (3d) 321.

Sharpe J.A. in Robb expressly stated that the exception applies to both res judicata and issue estoppel, a finding that is consistent with the decision of Brooke J.A. in Amopharm v. Harris Computer Corp. (1992 CanLII 7514 (ON CA), 10 O.R. (3d) 27), a decision of the Court of Appeal in 1992.

Although, not strictly speaking exceptions to either rule, a close examination of whether a judicial decision was final or not, was made on the merits, by a court of competent jurisdiction, or whether the parties were the same or their privies, and the issues identical may offer grounds for the non-application of issue estoppel to a particular case.

In the matter before me, there appears to be no issue as to whether Arbitrator Miller's decision was a judicial decision of a competent tribunal, properly made, that the parties were the same, and that it was upheld on appeal, with no application being made to have the appeal decision judicially reviewed.³ Although there may be some questions raised about the identity of the issues decided in the previous case and those raised in this arbitration, the relief requested by Mr. Olszewski in both arbitrations is identical.

Mr. Olszewski relies on the recent decision of the Supreme Court of Canada in Smith v. Co-operators as having provided the changed circumstance necessary to prevent the application of either res judicata or issue estoppel.

This decision clarified not only the necessary steps to be taken by insurers in terminating or refusing to pay benefits under the Bill 164 Schedule, but also established that Insurance Law in general, including the laws relating to statutory accident benefits, has as a principal objective the protection of consumers, and should be so interpreted. In Ms. Smith's case, this meant that her insurer had to rigourously observe the statutory requirements for notice and termination, failing which there was no valid refusal to trigger the statutory time-limits.

It should be noted that Mr. Olszewski's claim for statutory accident benefits was found to be barred by the expiry of a statutory limitation period, triggered by the Insurer's refusal to pay benefits. If the reasoning behind Smith applies equally to the OMPP Schedule⁴ then it is possible that the statutory limitation period has not yet begun to run, and that Mr. Olszewski is entitled to a hearing on the merits of his claim.

Mr. Olszewski has also submitted that, to date, there has been no hearing on the merits of his claim, and that both the decisions relied upon by the Insurer dealt with procedural rather than substantive issues.

In Doty v. Marks (57 O.L.R. 523, Ontario C.A.), Middleton J.A. attempted to summarize the earlier law on this point as shown in Payne v. Newberry (13 P.R. 392):

"The question is how and why the first motion was dismissed; it may be conclusive against the party moving the second motion, or it may be no obstacle at all. The question is, has there been a judicial decision against the plaintiff on the case he submits? There has been such a decision as would conclude the mover, if he omitted to show matters in his material, from mistake or inadvertence it may be, which were necessary for the completeness of his case...In such a case the first adverse judgement would be taken on the whole case and would prevent a second motion." The Master then points out that if the failure of a first motion arose from defects that prevented the material facts of the case from being considered at all, the same result would not follow. A new motion might be made when the defects were remedied.

Likewise, Urquhart J. in McCowan v. Menasco Manufacturing [(1941) O.J. No. 99], found that it was open to an applicant to make a new application, notwithstanding the failure of a previous motion on the same issue "particularly when one of the grounds for setting aside was purely technical."⁵

More recently, Borins J. in AGF Equity Fund et al. v. Transamerica Commercial Finance Corp. Canada et al. (1993 CanLII 8682 (ON CTGD), 14 O.R. (3d) 161) particularized the need for a decision on the merits as a pre-condition to estoppel per rem judicatum or res judicata:

What does the judgement of the motions court judge dismissing the first action stand for, taking into account the statement of claim in that case? In my view, it stands for the proposition that the statement of claim, as pleaded disclosed no reasonable cause of action because a material averment had been omitted. The judgement says nothing about the ultimate validity of the plaintiff's claims should they come to trial upon an amended or fresh statement of claim as this issue was never argued before the motions court judge. No issues of fact were litigated and, therefore, the merits of the plaintiffs claims were not considered. In other words, to adopt the reasoning in Pople v. Evans, because the merits of the case have not been dealt with the dismissal of an action because a material averment has been omitted from the statement of claim does not constitute a bar to another action arising out of the same circumstances and based on a statement of claim which contains the averments which had been omitted from the first action. Viewed in a functional sense, it follows that that the effect of the judgement was not an adjudication of the merits of those claims. Stated differently, the defendant's position is based on the form of the judgement when it is the substance of the matter actually decided which should control.

In the present case, it may be productive to explore the effect of the previous preliminary issue arbitration decisions in this matter.

As noted previously, Arbitrator Miller heard arguments on a motion by the Insurer as to whether Mr. and Mrs. Olszewski were precluded from proceeding to arbitration pursuant to section 281(5) of the Insurance Act. Following a brief hearing on that issue she concluded that they were, indeed, so precluded.

Section 281(5) of the Insurance Act provides that:

A proceeding in a court or an arbitration proceeding in respect of no-fault benefits must be commenced within two years of the insurer's refusal to pay the benefit claimed or within such longer period as may be provided in the No-Fault Benefits Schedule.

The decision of the arbitrator focussed on the question of whether the Applicant was entitled to rely upon a "rolling limitation period" as identified in the arbitration decision Kirkham and State Farm Mutual Automobile Insurance Company [(August 15, 1996) OIC A96-000141]. She found that they would be so entitled but for the appeal decision in that matter, which had rejected the concept of a "rolling time limit."

Although there was a perhaps implicit assumption by the parties and/or the arbitrator that a proper refusal, sufficient to trigger the start of a limitation period, had been made in this claim, there is no specific discussion as such in the decision, and certainly no finding made by the arbitrator that a proper refusal was made. A reasonable inference from the decision is that no finding was made because the point was not in issue and that no evidence was proffered by the parties.

The appeal, as well, appears to have turned on the issue of whether Kirkam applied to this matter. In fact, on page 4 of his decision, Director's Delegate Draper stated succinctly that "Kirkham is binding and determines the outcome of this case."

In that same decision however, the insurer also points to a reference by the Director's Delegate at page 5 of his decision of the issue of notice.

Finally it was suggested that Kirkham is distinguishable on the basis that the Insurer provided more detailed reasons for the termination than The Citadel gave the Olszewskis. I agree with counsel for The Citadel that it is unfair to raise this issue for the first time in oral argument at the appeal hearing. However, I am also satisfied that Citadel provided adequate notice.

I am satisfied that the Director's Delegate was correct when he found that Kirkham determined the outcome of the matter. I find, therefore, that both the arbitration and the appeal decision in this matter turned on whether the Applicant could use the theory of "rolling time limits" to defend against the Insurer's motion to dismiss the arbitration.

I would have no difficulty in finding that the issue of rolling time limits has been fully litigated, and would properly be subject to the application of either res judicata or issue estoppel.

That issue, however, has not been raised in this new arbitration application.

The Director's Delegate, in his decision, also rejected the Applicant's apparent attempt to raise the question of notice, on appeal, on the basis of unfairness. His further comment that he is satisfied that Citadel provided adequate notice is, however, at best, obiter, and, as well, the decision does not even hint at an evidentiary basis for that opinion.

The Federal Court of Appeal in Via Rail Canada Inc. v. National Transportation Agency (2000 CanLII 16275 (FCA), [2001] 2 F.C. 25) emphasized that reasons for a decision must include the findings of fact and the principal evidence upon which a finding is based.⁶ I do not accept that the Director's Delegate's comments, in themselves, especially lacking any reference to findings of fact or supporting evidence, constitute a judicial decision upon the issue of whether proper notice was given to the Applicant by the Insurer, sufficient to trigger the running of a limitation period. Consequently, I find that neither the arbitration decision nor the appeal decision specifically determined the issue of notice in a manner sufficient to trigger either issue estoppel or res judicata.

As mentioned earlier, a valid notice, given by the Insurer to the Insured, is a necessary pre-condition to the triggering of a limitation period.

Wigram V.C.'s decision in Henderson v. Henderson [(1843), 67 E.R. 313] is still cited for the proposition that all issues which properly the subject of an action are barred from re-litigation by res judicata:

The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgement, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence might have brought forward at the time.

Putting aside momentarily the question of "special cases," such as a change in the law, the characterization of the issues and necessary sub-issues on a preliminary issue may assist in deciding the points that properly belong to the subject of the litigation. In finding that Mr. Olszewski was "precluded from proceeding to arbitration," the arbitrator barred him from proceeding to a hearing on the merits of his application. The courts have had some experience in examining and interpreting such arbitral decisions on preliminary issues.

In one unusual case, Robertson v. Gamble (1997 CanLII 12136 (ON CTGD), 33 O.R. (3d) 461), Howden J. examined the effect of an arbitrator's preliminary issue decision barring access to arbitration by reason of an expired limitation period:

What Arbitrator Makepeace decided was not whether the plaintiff could or could not claim accident benefits but that she had no power as an arbitrator to relieve against his failure to meet the time limit in s. 22 of the regulation. She therefore concluded and ordered simply that he was precluded from proceeding to arbitration.

Although Arbitrator Miller's decision in the matter before me did not deal explicitly with such questions as relief of forfeiture and the jurisdiction of the Commission, as did the Robertson matter, it might be argued that implicit in her finding was the notion that due to the apparent expiry of the statutory limitation period there were no further matters within the jurisdiction of the Commission to be heard. She, or any other arbitrator, was without jurisdiction to hear the Olszewski claim on its merits.

Arguably, as in Robertson, the sufficiency of notice would not be a necessary element in a decision that turned solely on jurisdiction.

If, however, the pith and substance of Arbitrator Miller's decision was merely that the legislative time-limits for a hearing had been exhausted by the passage of time since the refusal of the insurer to pay the benefits claimed, then the Insurer's argument in this matter - that the acceptance of the validity of its refusal was a necessary part of the arbitrator's finding - would be reinforced.

The problem with this approach, however, is that Arbitrator Miller made no finding as to the sufficiency of notice. The only reference to this issue is by the Director's Delegate, in a confusing sentence also rejecting its consideration as an issue in the appeal.

Given the statutory pre-condition of notice, I find it quite possible that, barring exceptions, the issue of notice is caught by the rule in Henderson (supra).

Another possibility is, however, that to reach the finding they did, both the arbitrator and the director's delegate assumed the sufficiency of the notice, since neither makes reference to evidence of valid termination.

In Grier and Metro International Trucks Ltd. (1996 CanLII 11795 (ON CTGD), 28 O.R. (3d) 67), the Divisional Court, in the context of the application of the doctrine of functus officio, examined the consequences of a decision-maker relying upon a mistaken assumption in reaching her decision. An agreed statement of facts contained a "typo" which had the effect of confusing critical dates for the referee making the decision.

Macpherson J., writing for the Court, found that:

the parties accidentally placed before her an important fact which was incorrect. On the face of her first decision it is clear that this incorrect fact influenced her decision. Moreover, if there were any doubt about this, Referee Novick expressly confirmed her reliance in her subsequent decision dealing with the request for a rehearing.

He concluded:

In the present case, the parties made a mistake. The mistake influenced the decision of the referee. I can see no compelling reason for concluding that the mistake should not be corrected and the matter placed back before the referee for a new decision which would be untainted by reliance on the incorrect fact.

According to the court, a decision made in reliance upon an incorrect fact is a nullity.

If, in light of Smith v. Co-operators, the arbitrator's implicit assumption in this case, that a valid refusal by the Insurer was incorrect, then the Applicant should be afforded the benefit of a new hearing untainted by the reliance on that incorrect assumption.

However, re-opening a claim for accident benefits that dates from 1990 should not be done lightly.

The Court of Appeal in Toronto (City) v. Canadian Union of Public Employees, Local 79 (2001 CanLII 24114 (ON CA), 55 O.R. (3d) 541) re-examined the conflicting social priorities to be weighed in dealing with a plea of res judicata. Doherty J.A. stated:

Justice must, of course, look through a much broader lens than that worn by the party who seeks to relitigate. Other interests, including those of the previously successful litigant, those collaterally affected by the proposed relitigation (e.g. witnesses), the institutions responsible for controlling and administering the adjudicative process, and the community at large, are all affected when an issue that has been finally decided is relitigated. To those interests, finality is a central feature of justice and to the extent that relitigation uproots finality, it invites injustice. This is so whether the relitigation occurs in the same forum as the first adjudication, or in a different forum.

He went on to explain the balancing process required by an adjudicator faced with a plea of res judicata:

In deciding whether to permit relitigation, a court or tribunal must decide whether finality concerns should outweigh an individual litigant's claim that the justice of the specific case warrants relitigation. That determination is fact-specific and requires that the court or tribunal weigh these competing considerations in the context of the facts of the particular case. Not all relitigation compromises finality concerns to the same extent and finality is not as important in some facets of the law as in others. Similarly, a claim that the justice of the case requires relitigation is much stronger in some situations than in others.

In this matter, some six years have elapsed since the arbitration and almost 13 years since the event that gave rise to the claims.

Not only would memories of the events be diminished through the passage of time, but it is equally possible, if not probable, that potential evidence may have been destroyed in reliance upon the finality of the decision, or lost or misplaced in the interim.

It would certainly be more difficult for the Insurer to defend the claim made against it now on the merits, than it would have been a decade or more ago.

On the other hand, counsel for Mr. Olszewski advises that he still suffers from on ongoing impairment arising from the motor vehicle accident, an impairment that affects his life and his ability to make ends meet on a daily basis.

Binnie J. in Danyluk v. Ainsworth Technologies [(2001) 2001 SCC 44, 2 S.C.R. 460] concluded:

As a final and most important factor, the Court should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice. Rosenberg J.A. concluded that the appellant had received neither notice of the respondent's allegation nor an opportunity to respond. He was thus confronted with the problem identified by Jackson J.A. dissenting, in Iron v. Saskatchewan (Minister of the Environment and Public Safety) 1993 CanLII 6744 (SK CA), [1993] 6 W.W.R. 1 (Sak. C.A.) At p. 21:

The doctrine of res judicata, being a means of doing justice between the parties in the context of the adversarial system, carries within its tenets the seeds of injustice, particularly in relation to issues of allowing parties to be heard.

Whatever the appellant's various procedural mistakes in this case, the stubborn fact remains that her claim to commissions worth $300,000.00 has simply never been properly considered and adjudicated.

On considering the cumulative effect of the foregoing factors it is my view that the court in its discretion should refuse to apply issue estoppel in this case.

Likewise, in this matter, I am not inclined to bar Mr. Olszewski's arbitration at this time, on the basis of either res judicata or issue estoppel for the following reasons.

I find that the Insurer has not, to date, made a convincing case that either of res judicata or issue estoppel must necessarily apply to this matter.

Mr. Olszewski's claim appears to have never been heard on its merits.

Although there may have been a mention of the issue of the sufficiency of notice in the appeal decision, there is no evidence that evidence or submissions were made by the parties on that issue, or that a judicial finding was made, sustainable by evidence that directly determined the issue.

Although relevant to the application of res judicata, the case law, however, suggests that none of these problems, taken individually, is necessarily fatal to the application of res judicata or issue estoppel, depending on the analysis and characterization of the decision as interlocutory or final, and on its context.

However, it appears, based on the submissions to date, that if this matter is to be relitigated, the most cogent argument for re-opening would be based on the exception of a change in the law discussed earlier, and which applies to both res judicata and issue estoppel.

I accept that the Smith decision may well have set a new standard for the evaluation of the sufficiency of refusals to pay benefits. If this decision applies to the OMPP Schedule in as radical a manner as it does to the Bill 164 Schedule, then it would be a clear example of the "new law" exception to res judicata. It would also be a strong reason to use judicial or arbitral discretion to refuse to apply issue estoppel.

The Smith decision may well have changed the law in general relating to accident benefits, but, however, it is not clear whether it changed the law relating to the specific refusal of Mr. Olszewski's claim by his Insurer.

As noted by the Insurer, the Bill 164 Schedule differs in many important ways from the OMPP Schedule, which applies to Mr. Olszewski's claim. Indeed, there are differences in the statutory requirements for termination.

A finding of the sufficiency of a refusal by an insurer is usually based on a mixture of fact and law, following a hearing in which evidence is brought forward by affidavit, agreed statement of facts, or viva voce testimony.

I have no evidence before me of the events that formed part of the alleged termination of benefits by the Insurer, and, consequently am unable to conclude whether the application of Smith would result in any different conclusion from that reached by Arbitrator Miller and Director's Delegate Draper.

While I am not inclined to accept the Insurer's motion at this time, neither am I prepared to issue a final decision, clearing the road for a complete hearing on the merits of Mr. Olszewski's claims.

Even if there is a finding that Mr. Olszewski is not barred from proceeding by reason of the application of the theory of res judicata or issue estoppel, then there is still an open question as to the manner in which the matter should be heard.

In light of Rule 61 of the Practice Code,⁷ it is unclear whether, given the existence of a previous ruling on his claim, Mr. Olszewski must pursue his claim by means of an application for variation and revocation, and whether an arbitrator would have jurisdiction to hear this matter, on its merits, as presently framed.

Rule 61 is permissive. It provides that either party may apply to vary or revoke an order of certain pre-conditions are met. Rule 61.2 makes it clear that such applications are to be made only when "all of the issues in dispute have been finally decided", or with the express permission of the Director.

The situations which can trigger a variation/revocation application are given as:

(a) there has been a material change in the circumstances of the insured;

(b) evidence not available on the arbitration or appeal has become available; or

More recently, Director's Delegate McMahon followed the analysis in Ready, "subject to the caveat that all the applicable factors must be weighed together." He also held that

Given the expense and difficulty of a full hearing concerning events over a decade past, I am reluctant to deny the Insurer's preliminary issue motion, without first hearing evidence and submissions as to how, if at all, the Smith decision would affect the validity of the refusal in this matter, and whether Rule 61 mandates that this matter should proceed by way of variation or revocation rather than as a conventional arbitration.

The parties shall have 30 days from the issuance of this decision to indicate whether either or both wish to call further evidence or file further submissions on this issue, failing which I will rule on this preliminary issue on the basis of the record and the submissions made to date. Should the parties wish to call evidence, or make further submissions, arrangements may be made with the Commission for a hearing date in London or Toronto, or for a hearing to proceed by written submissions.

EXPENSES:

I defer any consideration of expenses in this matter until the completion of the preliminary issue hearing.

September 24, 2003

John Wilson Arbitrator

Date