Neutral Citation: 2003 ONFSCDRS 26

FSCO A02-000534, FSCO A02-000512, FSCO A02-000716

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

KAMAL DEO KHEMRAJ

INDRAINE KHEMRAJ

Applicants

and

RBC GENERAL INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before:

David Muir

Heard:

Written submissions were received on January 13 and January 20, 2003.

Appearances:

Mark DeWitt for Mr. Khemraj and Ms. Khemraj

Cary Schneider for RBC General Insurance Company

The Applicants, Kamal Deo Khemraj and Indraine Khemraj, were involved in a motor vehicle accident on August 11, 2001. Another individual Thakudyal Goberdham was also involved in a motor vehicle accident on the same day. Each of these three individuals have applied for statutory accident benefits from RBC General Insurance Company ("RBC"), payable under the Schedule.¹ The Applicants and Mr. Goberdham have each had a number of unresolved disputes, and each applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

A number of separate applications for arbitration have been brought and a number of Corn-mission files have been opened. Several of these files have been administratively consolidated and some of the files have been closed. Two administratively consolidated files,²involving applications for arbitration brought by Mr. Goberdham and (perhaps) Indraine Khemraj, appear to have gone to a pre-hearing in October 2002. During the course of this pre-hearing, the parties advised that they had reached a settlement. There is no indication in the file that Indraine Khemraj attended that pre-hearing, or was involved in the settlement. However, it does appear that Mr. Goberdham's involvement in the dispute resolution system may have ended at that time.

As a result of the confusion created by the manner in which the Commission has treated the various applications, I will deal with the issues raised in this motion by reference to the applications for arbitration which have been filed by the two remaining applicants - Kamal Deo Khemraj and Indraine Khemraj. As well, the parties should be aware that notwithstanding the purported "combining" of these various applications, there has as of yet been no order pursuant to Rule 30 of the Dispute Resolution Practice Code, (the "Code"). That issue remains to be determined by an arbitrator. Despite that, I have released one decision that applies equally in respect of the various applications for arbitration brought by the Applicants.

The motion proceeded in the absence of any evidence other than that which is revealed in the documents contained in the various Commission files. The parties assumed many facts in evidence in making their submissions. In the circumstances I have decided to proceed on that basis, but in the result, my conclusions are somewhat more tentative than they might otherwise have been.

RBC seeks to join with the existing applications for arbitration made by the Applicants, various other claims of the Applicant which have been denied by RBC, but not yet mediated or, if mediated, pursued in another forum.

In the motion, RBC claims the following relief:

An Order staying these proceedings until the Applicants have applied for mediation of all issues that are in dispute and have not been mediated;
An Order that once all of the outstanding matters have been mediated that they be combined with their respective applications for arbitration;
An Order that the Applicants are to advise the Insurer and the Commission in writing of all issues in dispute and the particulars of those issues within 30 days of the Order of the arbitrator;
An Order excluding Mr. Vaskevich, Mr. Simkhaev and Mr. DeWitt from this proceeding;
An Order of expenses as against either the Applicants and/or their representatives in any event of the cause as a set-off against any amount paid in this proceeding with respect to the issue in dispute.

Result:

The applications for arbitration identified in this decision are stayed. The pre-hearing in these matters will be resumed and the issue of the stay will be revisited at that point in accordance with my reasons below.
An Order adding all of the treatment plans in question to the existing arbitrations is premature and will be considered at the resumption of the pre-hearing.
RBC is not entitled to an Order that the Applicants identify all issues in dispute.
RBC is not entitled to an Order excluding Mr. DeWitt as the Applicants' representative.
The Applicants will pay to RBC the total sum of $300 in expenses. This sum is payable only out of any award in respect of any of the treatment plans submitted by Centre City Health Recovery Clinic.

A pre-hearing in this matter was held on December 5, 2002. In my pre-hearing letter, I recorded the following:

A pre-hearing discussion in these three matters was scheduled to be held on December 5, 2002, at 11:00 a.m., at the offices of the Financial Services Commission of Ontario. Neither Mr. Khemraj nor Mrs. Khemraj participated. Mr. Rama Govindarajoo on behalf of RBC General Insurance Company ("RBC") was present. Mr. Schneider, legal counsel, represented RBC.

Mr. Mark DeWitt, agent, represented Mr. Khemraj in respect of some, but not all of the issues between himself and RBC. Apparently Mr. Khemraj has been represented by a Mr. Vladislav Simkhaev in respect of his claim to the costs of an examination pursuant to section 24 of the Schedule. Mr. DeWitt also represented Mrs. Khemraj in respect of her disputes with RBC.

As indicated, neither of the Applicants were in attendance at the pre-hearing. Telephone calls were made to attempt to clarify the extent of Mr. DeWitt's authority to deal with the issues in dispute. At some point in the pre-hearing RBC and the writer were advised that Mr. Khemraj was not prepared to authorise Mr. DeWitt to represent him in respect of his claims to the cost of examinations as he had another representative on that issue. It was also revealed that either Mr. or Mrs. Khemraj had commenced an action seeking housekeeping and home maintenance benefits in the Ontario Court.

It was agreed that the pre-hearing could not proceed in particular because of the non-attendance of Mr. Simkhaev who was Mr. Khemraj's representative in respect of at least one issue.

Mr. Khemraj has so far made two applications for arbitration. One concerns two treatment plans (September 1 and November 13, 2001) for chiropractic treatments provided by Centre City Health Recovery Clinic ("Centre City"). On this application the applicant has identified Walter Vaskevich, an employee of Centre City, as his representative. The second application concerns a section 24 expense for a psychological assessment. On this application Mr. Khemraj indicated that his representative was Vladislav Simkhaev, a paralegal from the firm VBSK Monolith & Associates.

RBC also claims, and it is not denied by Mr. Khemraj, that Mr. Khemraj has also issued a statement of claim in small claims court for housekeeping benefits. According to RBC, the Applicant has indicated that his representative in that matter is Mr. Simkhaev.

According to RBC, and not denied by Mr. Khemraj, there are nine other treatment plans which have been submitted to RBC, and rejected, but not yet referred to mediation. The treatment plans are all for treatments proposed by Centre City and include chiropractic, massage, active physical therapies, laser acupuncture, rehabilitation strengthening and physical modalities. These treatment plans, according to RBC and not denied by Mr. Khemraj, are all dated between November 2001 and February 2002.

Indraine Khemraj has made one application for arbitration in respect of two chiropractic treatment plans dated August 20 and October 11, 2001. The medical services in question were (or are to be) provided by Centre City, and on her application, Ms. Khemraj indicated that her representative was Walter Vaskevich.

RBC claims, and again it is not denied by Ms. Khemraj, that six further treatment plans have been submitted to it by Centre City, denied by the Insurer, but not yet referred to mediation. These treatment plans are dated from November 9, 2001 to February 8, 2002 and include plans of proposed further chiropractic treatment as well as rehabilitation strengthening, physical modalities, massage and laser acupuncture.

I have not been advised that any of these further treatment plans have been referred to mediation by either RBC or the Applicants. Neither party has offered an explanation for the fact that they have not yet been mediated.

There is a question about which of the various representatives noted above represent the Applicants in respect of their various claims. For reasons set out below, I will proceed with this motion on the assumption that Mr. DeWitt represents the Applicants, in respect of all of the issues for which applications for arbitration have been made to date and set out above. I also take it from those submissions that Mr. DeWitt represents Mr. Khemraj in the small claims matter as well. If either of these assumptions is not the case, then Mr. DeWitt is directed to advise RBC and the Commission of the precise scope of his authority within 15 days of the date of release of these reasons.

I turn now to consider the relief sought by RBC.

#1- Stay of the Arbitrations

RBC submits that all of the outstanding claims arising out of the August 11, 2001 motor vehicle accident should be dealt with in one forum and in one arbitration proceeding. RBC states that having chosen to bring an issue to arbitration, the Applicants are bound to bring all of their issues to this forum. To do otherwise only increases the cost for all concerned and runs the risk of inconsistent results. RBC further submits that the Applicants have chosen to proceed in this fashion with a view to levering the Insurer into a settlement to avoid increased costs with each new application for mediation and/or arbitration. Alternatively, RBC submits that this approach is taken as a result of a misunderstanding of the Schedule, the Dispute Resolution Practice Code and the Applicants' representatives have as a result demonstrated their lack of competence to represent the Applicants.

RBC relied on two recent decisions of the Commission in Suliman v. Economical (FSCO A02-000596, October 16, 2002 and December 16, 2002) dealing with a situation in some ways similar to the problem here, and involving the same representatives and service provider. In Suliman, the insurer was seeking to have added 11 unmediated treatment plans from a service provider, to the arbitration which included three mediated treatment plans of the same provider.

The Arbitrator found that all of the treatment plans arose from the same motor vehicle accident, involved the same parties, including the same service provider. The Arbitrator further found that to allow the individual treatment plans to proceed to separate arbitration hearings would result in undue duplication of evidence, potentially inconsistent decisions and that to deal with all of the disputed treatment plans in one proceeding would more likely result in the efficient, expeditious and fair adjudication of the disputes between the parties.

The Applicants submit that an arbitrator has no authority to add unmediated treatment plans to an arbitration, or to adjourn or stay an arbitration pending the mediation of other potential disputes because there is no issue in dispute within the meaning of section 282(3) of the Insurance Act. That is, until there is an issue in dispute, there is nothing to add to the arbitration. The Applicants also contend that an arbitrator has no jurisdiction to compel an insured to identify all issues in dispute, as requested by RBC.

The Applicants also argue that they are entitled to a speedy, inexpensive and informal dispute resolution process. To allow an insurer to request the adjournment of a proceeding to facilitate its referral of an issue to mediation or to require an applicant to seek mediation, is inconsistent with the purpose of the process and gives insurers the opportunity to stall an arbitration at the last minute by demanding a mediation of an allegedly new issue.

The argument of the Applicants focusses on the meaning of "issues in dispute" in section 282(3) of the Insurance Act. By implication, their submission is that there is no issue in dispute until the Applicant determines that it wishes to proceed to arbitration.

I do not agree.

The phrase "issue in dispute" is not defined in the Insurance Act, but it appears in a number of other sections in the Act. For example, section 280(1) provides that either an insurer or an insured person may refer to a mediator "any issue in dispute" in respect of the insured person's entitlement to benefits..." This suggests that if the phrase was intended to have a precise legal meaning, it appears that an issue is in dispute at some point prior to a referral to mediation. Ultimately, I find that the meaning of these words should be determined in a practical way having regard to the context in which they appear and the ultimate goal of the dispute resolution system - fair, just and expeditious dispute resolution.

Considering this question in a practical way, it is beyond controversy that the Applicants have put their entitlement to medical treatments in dispute with two of their applications for arbitration. The first question then becomes whether the other treatment plans are separate issues which must be separately mediated or are they really just elements of the issues already in dispute between the parties?

Consider for example several of the treatment plans of chiropractic submitted on behalf of Indraine Khemraj. The only difference between them appears to be the period of time during which the treatment would be provided and the frequency of the treatments. Having referred one such treatment plan to arbitration, it is not at all clear why a virtually identical treatment plan for a contiguous consecutive period of time must go to mediation. However, without having all of the treatment plans before me and the benefit of the parties submissions in that regard, I am not able to make definitive findings in respect of all of them. Whether in fact these individual treatment plans need to be separately mediated will be considered by the parties at the resumption of the pre-hearing.

If on the other hand these other treatment plans are discrete issues that must be mediated, then I agree with the comments of Arbitrator Blackman in Suliman, supra, that applicants do not have an unrestricted right to refer certain issues to arbitration while withholding others or to refer other matters to some other forum. As has been pointed out in many Commission decisions, a multiplicity of legal proceedings should be avoided if at all possible.³

I accept the submission of the Applicants that there is nothing express in the Insurance Act or the Schedule that empowers me to adjourn and/or stay an arbitration in order to have further issues mediated and then added to the existing proceeding. I also take their point that in some circumstances to adjourn an arbitration because a new issue has arisen that has yet to be mediated could be contrary to the goal of a speedy and efficient dispute resolution system. It also might be inappropriate to do so where a party was seeking to add a new issue in order to gain some strategic advantage or delay the proceedings. I note, however, that none of these kinds of concerns apply here. The request of RBC to include the other treatment plans would not, if consented to, have caused any appreciable delay in the matter proceeding to arbitration and there is no obvious tactical advantage to these matters being consolidated in the manner proposed by the Insurer. I also note that the pre-hearing was adjourned with little accomplished because neither of the Applicants were present and one of their several representatives (at the time) failed to appear.

What the Insurer's request does avoid is the potential of a multiplicity of proceedings involving identical issues, relatively small sums of money, with potentially enormous inconvenience and expense for all of those involved. Most importantly, RBC's proposal avoids the potential for an abuse of the Commission's process, in the Applicants seeking to lever a favourable settlement out of the Insurer in order to avoid the inevitable expenses associated with it having to respond to all of them individually. In the absence of any other explanation for the approach taken by the Applicants in this matter, the inference I was asked to draw by RBC is a fair one. To prevent this potential abuse I find that a stay of the arbitration pending a resumption of the pre-hearing is appropriate. At the resumption of the pre-hearing, if the Applicants indicate that they are not pursuing those other matters or can provide some reasonable explanation for their decisions to hold those claims back, the stay might be lifted and the matter can proceed.

In coming to these conclusions, I have not dealt specifically with the question of the ability of Mr. Khemraj to maintain his separate action for housekeeping in small claims court while proceeding with the treatment and section 24 issues to arbitration. It does appear that commencing a separate court action is consistent with the pattern of behaviour the Applicants have exhibited in their handling of the treatment plans, however, I recognize that there may be other explanations for Mr. Khemraj’s decision. I am also reluctant to make any definitive findings with respect to this issue in the absence of an evidentiary record and submissions on the issue. I know virtually nothing about the small claims court action, nor did either party make any submissions in respect of the ability of a party to maintain proceedings in two forums in pursuit of benefits under the Schedule. I again direct the parties to Non-Marine Underwriters, Mbrs. of Lloyd’s and Mangat, supra, which indicates the approach to this issue recently taken at the Commission. I will also entertain submissions from the parties at the resumption of the pre-hearing on this discrete issue, should that be necessary.

An expeditious (and prudent) manner of proceeding may be for RBC to refer these outstanding issues to mediation in anticipation of their being added to the arbitration. In the event that RBC, if it has not already done so, refers the other treatment plans to mediation, the Applicants may avoid the need for mediation of any of these issues by providing written notice that they are no longer seeking the funding of any of these treatment plans.

#2 - Adding the issue to the Arbitration

RBC seeks to add all of the other issues to the arbitration. I find that such an order is premature. Implicit in my reasons above, is the possibility that these matters are already issues in the arbitration. They have not been mediated as of yet and I do not know whether any or all of them will be. I also do not have the treatment plans before me, nor do I have very much information about the small claims court action. I find that it is preferable to deal with those issues together with the question of the consolidation of the various applications for arbitration pursuant to Rule 30 of the Code. These issues will also be considered at the resumption of the pre-hearing.

#3 - Identifying the Issues in Dispute

This Order would appear to be seeking what is implicit in the task of considering whether or not the unmediated treatment plans are novel issues in dispute - that will be undertaken at the resumption of the pre-hearing and I decline, at this point, to make such an order.

RBC knows what treatment plans have been submitted and what other claims have been made. Until otherwise advised by the Applicants, it can be assumed that these are issues in dispute which may or may not require referral to mediation.

#4 - The Representation Issue

At the pre-hearing I ordered that Mr. and Ms. Khemraj each provide by the end of the business day, December 20, 2002, written authorizations in the nature of that required in Glinka and Dufferin Mutual Insurance Company (FSCO P01-00002, March 7, 2001), setting out who is representing each of them in respect of each of the various issues in dispute. To be clear, these authorizations were to identify the representative and the precise authority that each representative had been given with respect to the many issues that are in dispute.

On January 12, 2003, an authorization in the appropriate form and dated December 4, 2002 was received from Indraine Khemraj. The document also authorizes Mark DeWitt of VBSK Monolith & Associates to act as Indraine Khemraj's agent "in all matters connected to this proceeding."

On January 20, 2003, Kamal Deo Khemraj provided a document dated January 20, 2003, authorizing Mark DeWitt of VBSK Monolith & Associates to act as his agent "in all matters connected to this proceeding." The proceeding is only identified as RBC ats Kamal Deo Khemraj, Claim/Policy #1262100-20010811, Date of Loss: August 11, 2001. In addition, in one of the several files associated with these parties, there is a signed "Glinka" document dated December 4, 2002 from Mr. Khemraj which is identical to the January 20th authorization, except for the absence of a claim/policy number.

None of these authorizations strictly complies with my order in that they do not also identify which representative is representing the applicants in respect of each of the issues in dispute. However, some clarity is provided in the submissions provided by Mr. and Ms. Khemraj. In this submission it is said that Indraine Khemraj is represented by Carlos Pereira, with respect to "all matters other than medical and rehabilitation and section 24 expenses at this time." The submission does not describe what "all matters" refers to. In respect of Mr. Khemraj’s representation, in his submission he advises that he is to be represented in "all respects" by Mr. DeWitt.

As indicated above, I have assumed, until Mr. DeWitt tells me otherwise, that the scope of the "Glinka" authorizations he has provided include all of the issues for which applications for arbitration have been made as well as the small claims court matter. I find that having authorized Mr. DeWitt to represent them "in all matters connected to this proceeding," the Applicants have released Mr. Vaskevich and Mr. Simkhaev as their representatives in everything but a technical sense. In the circumstances, I find that making an order excluding them from this proceeding would be moot, as they have withdrawn with the consent of the Applicants.

As for Mr. DeWitt, I find that he is entitled to remain as the Applicant’s representative. I am only entitled to exclude a representative, other than a Barrister and Solicitor, pursuant to Rule 9.9 of the Code where I find that:

such person is not competent to properly represent or to advise the party or witness or does not understand and comply with these Rules and the duties and responsibilities of a representative, agent or advisor.

RBC submits that, in choosing to proceed in the manner that they have, the Applicants representative has shown that he is not competent to represent them any further.

I do not agree.

An order excluding a party's representative should only be done in the clearest of cases and only where it is necessary to protect the proper administration of justice.⁴ To my mind, a finding that a party has engaged in a course of conduct that may lead to an abuse of process does not, necessarily, require the conclusion that an agent continuing to represent that party will bring the administration of justice into disrepute. If the practice continues in a proceeding or where there are other failures to comply with orders, undertakings, etc., an order excluding a representative may be appropriate. This is not the case here.

EXPENSES:

Each party seeks their expenses of this motion. In the circumstances of this case I find that RBC is entitled to their expenses fixed in the nominal total sum of $300 - which sum is to be payable out of any award in respect of treatment plans submitted by Centre City. I make this finding for the following reasons. This motion was necessitated by the conduct of the Applicants and their multiple representatives (at the time). The Applicants have offered no explanation of their actions in respect of the multitude of treatments plans in the queue. The pre-hearing had to be adjourned with little accomplished because the Applicants, and in particular one of their three representatives (at the time), were not in attendance at the pre-hearing. As against those considerations is the fact that RBC was perfectly entitled to refer all of the outstanding issues to mediation and has chosen not to do so. I have also considered the important need to ensure access to the dispute resolution system for those of modest means.

March 3, 2003

David Muir Arbitrator

Date