Neutral Citation: 2004 ONFSCDRS 141

FSCO A03-000148

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MOSTAFA CHERAGHI-SOHI

Applicant

and

ZURICH NORTH AMERICA CANADA

Insurer

PRELIMINARY ISSUE DECISION ON PRODUCTION

Before:

Beth Allen

Heard:

On July 22, 2004 by telephone conference discussion Written submissions received by September 3, 2004

Appearances:

Wendy Sokoloff for Mr. Cheraghi-Sohi

James K. Brown for Zurich North America Canada

Issues:

The Applicant, Mostafa Cheraghi-Sohi, was injured in a motor vehicle accident on November 26, 2001. He applied for and received statutory accident benefits from Zurich North America Canada ("Zurich"), payable under the Schedule.¹ Zurich refused to pay some of the Applicant's claims for accident benefits. 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 motion is :

Is Zurich required to produce information as to whether or not it conducted surveillance upon which it does not intend to rely?

Result:

Zurich is required to produce information as to whether or not it conducted surveillance upon which it does not intend to rely.

Background:

This decision deals with a production dispute that emerged during a resumption of the pre-hearing discussion held on July 22, 2004.

Ms. Sokoloff requested production of information from Zurich as to whether or not it had conducted any surveillance upon which it would not be relying at the hearing. She submitted that an adverse inference can be drawn about the surveillance by the arbitrator from this information – as to its value in challenging the Applicant's disability – from Zurich not choosing to produce it.

Mr. Brown objected to this request and submitted that the Dispute Resolution Practice Code (4th edition, updated October 2003) (the "Code”) does not require an insurer to provide information about whether or not it has conducted surveillance upon which it has chosen not to rely.

Reasons for Decision:

Rule 40 of the Code governs the production of surveillance material by an insurer. It provides:

40.1 If a party intends to rely on any portion of surveillance or investigative evidence, including video tapes, photographs, reports, notes and summaries of surveillance observations or investigations, at least 30 days before the hearing, the party shall provide:

(a) the names and qualifications of the persons who secured the investigative or surveillance evidence, the dates, times and places where any surveillance or investigation was undertaken; and

(b) copies of all videotapes, photographs, investigative reports, notes and summaries taken or prepared in connection with the issues in dispute.

I agree with Zurich's counsel that Rule 40 does not address the issue before me.

In her submissions, the Applicant's counsel relies on the Campeau and Liberty Mutual Insurance Company, (FSCO A00-000522, March 12, 2001) where the Arbitrator held that it would be unfair and contrary to the duty of utmost good faith to its insured for an insurer to be allowed to pick and choose amongst its surveillance evidence, and only produce that which it feels would advance its case. The Applicant's counsel also refers in her submissions to the Puljic and Zurich Insurance Company appeal (FSCO P00-00022, June 1, 2000) and Devji et al. v. Longo Brothers Fruit Markets Inc., 1999 CanLII 15071 (ON CTGD), 45 O.R. (3d) 82 (Ont. Ct. Gen.Div.). However, she did not indicate the bases on which she was relying on the latter two cases.

Zurich's counsel submits, and I agree, that the Devji case is not pertinent to the production matter before me, as it deals with the obligations of a third party insurer to produce details of surveillance in a personal injury action. The matter before me involves the obligations of a first party insurer to produce surveillance information in the context of the arbitration process at the Commission.

I also find that the Campeau and Puljic matters do not address the particular issue before me. There is no issue before me as to whether Zurich intends to pick and choose among surveillance it has conducted.

I considered the parties' submissions and conclude as follows:

I find that Zurich is required to produce information as to whether or not it conducted surveillance upon which it does not intend to rely. I find this information might be relevant to the issues in dispute. As well, I can see no prejudice that can result to Zurich from producing this information, since, according to Rule 40 of the Code, the arbitrator will not receive the surveillance if Zurich decides not to produce any of it. I find the Applicant is entitled to request that an adverse inference be drawn by the arbitrator. However, because there are any number of reasons an insurer may choose not to rely on surveillance it has conducted, the information requested by the Applicant might be of limited assistance to his case.

Order:

I therefore order Zurich to produce information as to whether or not it has conducted surveillance upon which it does not intend to rely at the hearing.

September 27, 2004

Beth Allen Arbitrator

Date