Neutral Citation: 2004 ONFSCDRS 139

FSCO A03-000520

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

N. H. Applicant

and

GENERAL ACCIDENT ASSURANCE CO. OF CANADA Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Beth Allen

Heard: July 28, 2004, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on July 30, 2004.

Appearances: Mrs. N.H. not in attendance Marlett Dobson for General Accident Assurance Co. of Canada

Issues:

The Applicant, Mrs. N.H., was injured in a motor vehicle accident on February 19, 1993. She applied for and was refused statutory accident benefits from General Accident Assurance Co. of Canada ("General Accident"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and the Applicant 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 in this hearing is:

Does the Applicant have the capacity pursuant to Rule 10.3 of the Dispute Resolution Practice Code² to proceed with the arbitration hearing?

The substantive issues in this hearing are:

1. Is the Applicant entitled to weekly benefits at $185.00 per week pursuant to subsection 13(1) of the Schedule?

2. Is the Applicant entitled to child care benefits under subsection 13(4) of the Schedule?

3. Is the Applicant precluded from proceeding with her claim for entitlement to weekly benefits under subsection 13(1) of the Schedule because that issue has already been arbitrated?

4. Are the Applicant's claims for statutory accident benefits statute-barred as having been commenced outside the two-year limitation period provided by subsection 281(5) of the Insurance Act and section 26 of the Schedule?

5. Is the Applicant entitled to her arbitration expenses pursuant to subsection 282(11) of the Insurance Act?

6. Is General Accident entitled to its arbitration expenses pursuant to subsection 282(11) of the Insurance Act?

7. Is General Accident entitled to its assessment fee pursuant to the now repealed subsection 282(11.2) of the Insurance Act?

8. Is the Applicant entitled to interest on any overdue amounts pursuant to subsection 24(4) of the Schedule?

Result:

1. The Applicant is presumed to have the capacity to proceed with the arbitration hearing.

2. The Applicant's claims for weekly benefits and child care benefits are dismissed.

3. The Applicant is not entitled to her arbitration expenses pursuant to subsection 282(11) of the Insurance Act.

4. General Accident is not entitled to its arbitration expenses pursuant to subsection 282(11) of the Insurance Act.

5. General Accident is not entitled to its assessment fee under the now repealed subsection 282(11.2) of the Insurance Act.

EVIDENCE AND ANALYSIS:

Background:

The Applicant was involved in a motor vehicle on February 19, 1993. A mediation was conducted on September 24, 2003 where the issues of the Applicant's entitlement to weekly benefits and child care benefits were mediated. On the Application for Arbitration dated October 27, 2003 under the heading "Weekly Benefits", in answer to the question "Which weekly benefit are you disputing?", the Applicant placed a check mark in the box for "initial entitlement to benefit." She also indicated under the heading "Other Disputes" that she was disputing "Child Care" benefits.

The Applicant did not attend the pre-hearing scheduled on January 15, 2004, nor did a representative on her behalf. Mr. Joseph Grossman, then counsel to General Accident, attended.

In his pre-hearing summary, dated January 21, 2004, addressed to the Applicant and Mr. Grossman, and copied to General Accident's representative, the pre-hearing arbitrator recounts some of the problems associated with the Applicant's communications with the Commission around the time of the pre-hearing discussion. The Applicant had sent back to the Commission her Notice of Pre-Hearing Discussion containing a notation with an indiscernible meaning. The then Acting Senior Arbitrator clarified by letter, dated January 7, 2004, to the Applicant that she should make herself available for the pre-hearing discussion by telephone. On January 9, 2004, the Applicant faxed the Acting Senior Arbitrator's letter back to her with a message that suggested that she would not be attending the pre-hearing. The pre-hearing arbitrator states in his report that he attempted to contact the Applicant by telephone and left messages advising her of the importance of the pre-hearing discussion. The Applicant did not call back.

Counsel for General Accident raised concerns about the Applicant's capacity to carry on with the arbitration process. In his pre-hearing summary, the pre-hearing arbitrator pointed out that Rule 10.3 of the Dispute Resolution Practice Code (the "Code") provides that an adjudicator may direct a preliminary issue hearing where a party has exhibited signs of mental difficulty during the course of a mediation, settlement discussion, neutral evaluation or proceeding. He also set out the relevant portion of the Ontario Substitute Decisions Act, S.O. 1992, c.30, where it provides that a person is incapable of managing property if the person "is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision."

In the pre-hearing summary, the pre-hearing arbitrator made the following orders:

1. That the arbitration hearing be stayed until the resolution of the capacity issue.

2. That the Applicant submit the name and address of her current treating physician or psychiatrist to the Commission, since it might be necessary for the Commission to receive medical evidence concerning her current capacity, to be provided within two weeks of the date of the pre-hearing summary.

The pre-hearing arbitrator further suggested that the Applicant request that her physician provide a note from her treating physician or psychiatrist indicating that she is fully able to understand the nature and consequences of her arbitration application, including the possibility of her incurring the Insurer's arbitration expenses if she is not successful.

By way of background, two arbitration decisions have addressed the capacity issue in relation to the Applicant. The arbitrator who presided over an arbitration hearing on October 14, 1997 held in the N.H. and General Accident case³ that the Applicant was mentally competent to proceed with the arbitration. In an arbitration hearing held on April 30, 1999, the arbitrator in the N... H... and Guarantee case⁴ found that the Applicant was mentally capable to proceed with the arbitration.

The Hearing:

An arbitration hearing into the preliminary issue of the Applicant's capacity under Rule 10.3 of the Code was scheduled for July 28, 2004 at 10:00 a.m. at the offices of the Financial Services Commission of Ontario. Ms. Marlett Dobson, the new counsel for the Insurer, attended on behalf of General Accident. The Applicant did not attend the hearing. I called a recess of the hearing until 10:30 a.m to allow time for the Applicant to attend. Ms. Dobson undertook to call the Applicant. Ms. Dobson indicated that she spoke to the Applicant who uttered some unexplained comments and suddenly hung up on her.

Ms. Dobson indicated that she had recently taken carriage of the matter and required some time to make submissions as to General Accident's position in view of the circumstances of the Applicant's non-attendance at the hearing. I set a deadline of June 30, 2004 for Ms. Dobson's submissions, and a deadline of August 13, 2004 for the Applicant to put in writing her intentions with respect to her Application for Arbitration.

Ms. Dobson filed with the Commission, and copied to the Applicant, her submissions in compliance with the deadline. The Applicant did not respond to the request for a written explanation of her intentions.

A Notice of Hearing of Preliminary Issue, dated March 16, 2004, had been issued to the Applicant, the General Accident representative, Cathyrn McAllister, and General Accident's past counsel, Mr. Grossman. The Notice was sent to the Applicant's last known address in Mississauga. The Notice advises the parties of the date, time and venue for the preliminary issue arbitration hearing and alerts the parties "if you or your representative do not attend at the hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of arbitration proceedings." I am satisfied that the Applicant received adequate notice of the arbitration hearing.

The Applicant failed to comply with the pre-hearing arbitrator's order to provide contact information for her treating physician or psychiatrist, and to comply with his suggestion that she provide a note from her treating physician or psychiatrist as to her capacity. Neither did she provide written notice of her intentions with regard to her Application for Arbitration, as I requested.

The Applicant's capacity has been put at issue in this matter. Under these circumstances, the Commission must fulfill certain obligations to adult applicant's to put procedural safeguards into place to safeguard the rights of applicants displaying mental difficulties. At law, there is a presumption that a person has mental capacity, unless evidence is brought to rebut that presumption. In this case, the Applicant is required to rebut the presumption that she has the mental capacity to proceed with the arbitration hearing. I find because she has not provided evidence of incapacity, she has failed to rebut the presumption. The Applicant is therefore presumed to have the capacity to proceed with the arbitration hearing. Under these circumstances, I will proceed with the hearing in the Applicant's absence.

Reasons for Decision;

Since the Applicant did not attend the hearing, Ms. Dobson requested I dismiss the arbitration on alternate grounds: namely, that the Applicant is precluded from proceeding to arbitration on both her weekly benefits and child care benefits claims because in filing her Application for Arbitration, she exceeded the two-year limitation period under the Insurance Act and the Schedule; and with respect to the weekly benefits claim, because that issue was already adjudicated.

I have decided to dismiss the matter. However, my decision is based on the fact that the Applicant has not satisfied her obligation to bring evidence to prove her case. The Applicant has provided no productions, or any evidence of any kind, to support her claims for weekly benefits and child care benefits.

I therefore dismiss the arbitration.

I find I need not decide the limitation issue or determine whether the weekly benefits issue has already been adjudicated.

EXPENSES:

The parties claim arbitration expenses under subsection 282(11) of the Insurance Act which gives arbitrators the discretion to award expenses to parties to an arbitration hearing. Regulation 664 of the Insurance Act, the terms of which are replicated in Rule 75 of the Code, sets out the criteria to be considered on an award of expenses.

Rule 75 of the Code requires that the arbitrator take into account: (a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether novel issues are raised in the proceeding; (d) the conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders; and (e) whether any aspect of the proceeding was improper, vexatious or unnecessary.

The Applicant was not present to make submissions as to her arbitration expenses.

I have decided, in the circumstances of this case, not to make an award of expenses against the Applicant.

Rule 10.3 under the Code assists arbitrators with determinations about how to handle cases where an adult applicant displays conduct that raises questions about their mental ability. Despite previous findings of capacity, I am troubled by the fact that the issue of the Applicant's capacity has come up on several occasions, including in relation to this hearing. When I look at the situation before me, I am mindful that the finding of the Applicant's mental capacity arises not from evidence before me, but rather from a presumption. In other words, there still remains in my mind a question about the Applicant's capacity. I find that Rule 10.3 draws arbitrators' attention to how to handle cases involving adult parties who exhibit mental difficulties during a proceeding and provides certain protections and safeguards to ensure fair treatment.

Considering criteria (d) and (e) in Rule 75, rather than regarding the Applicant's unusual or uncooperative conduct as a reason to punish her through an award of expenses, I look at her conduct, in the spirit of Rule 10.3, as a reason to decline imposing expenses against her. I find the Applicant is therefore not required to pay any of General Accident's arbitration expenses, pursuant to subsection 282(11) of the Insurance Act.

General Accident also requests the amount of $3,000 pursuant to the now repealed subsection 282(11.2) of the Insurance Act. Since that provision has been repealed, I find that arbitrators do not have the authority to award an insurer its assessment fee. I therefore find that the Applicant is not required to pay any part of General Accident's assessment fee pursuant to subsection 282(11.2) of the Insurance Act.

September 24, 2004

Beth Allen Arbitrator

Date

Neutral Citation: 2004 ONFSCDRS 139

FSCO A03-000520

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

N.H. Applicant

and

GENERAL ACCIDENT ASSURANCE CO. OF CANADA Insurer

ARBITRATION ORDER

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

1. The Applicant is presumed to have the capacity to proceed with the arbitration hearing.

2. I dismiss the Applicant's claims for weekly benefits under subsection 13(1) and child care benefits under subsection 13(4) of the Schedule.

3. The Applicant is not required to pay General Accident's arbitration expenses under subsection 282 (11) or any amount under subsection 282(11.2) of the Insurance Act.

September 24, 2004

Beth Allen Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents Before January 1, 1994, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2Fourth Edition, updated October 2003.
3. 3N.H. and General Accident Assurance of Canada, (FSCO A96-001954, January 30, 1998)
4. 4N... and H... and Guarantee Company of North America, (FSCO A98-001325, May 4, 1999)