Financial Services Commission of Ontario
Neutral Citation: 2004 ONFSCDRS 152
FSCO A02-001636
BETWEEN:
CHUNG JIN PARK
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
REASONS FOR DECISION
Before: Suesan Alves
Heard: May 29, 2003 in person at the offices of the Financial Services Commission of Ontario in Toronto; October 10, 2003 via by teleconference call. Written submissions were received by April 2, 2004.
Appearances:
No-one attended for Mr. Park on May 29, 2003.
Linda Kiley attended for Mr. Park on October 10, 2003 and was removed from the record; since then Mr. Park has represented himself.
Darrell March for Wawanesa Mutual Insurance Company
Issues:
The Applicant, Chung Jin Park, was involved in a motor vehicle accident on February 11, 1998. He applied for arbitration at the Financial Services Commission of Ontario in relation to his claims for statutory accident benefits payable under the Schedule.1 Mr. Park by his counsel withdrew the arbitration application at Wawanesa's request, and the Commission closed its file.
Wawanesa then requested a return of its filing fee of $3,000 and its expenses. A pre-hearing was then scheduled at Wawanesa's request. At the pre-hearing Wawanesa brought an oral motion for an order dismissing the arbitration application, prohibiting Mr. Park from commencing any other accident benefits applications at the Commission, expenses in the amount of $1,500, and an award in respect of the $3,000 assessment paid by Wawanesa. Following the pre-hearing Mr. Park advised that he had been out of the country and had not received notice of the pre-hearing, and wished to continue the arbitration proceeding.
The issues are:
Should the arbitration application be dismissed?
Should Mr. Park be prohibited from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario?
Is Mr. Park liable for the payment of Wawanesa's expenses in the amount of $1,500 under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Park liable to pay Wawanesa the amount of $3,000 under section 282(11.2) of the Insurance Act, because he commenced an arbitration that was frivolous, vexatious and an abuse of process?
Result:
Mr. Park withdrew the arbitration application through his counsel by letter dated January 28, 2003. He has not shown that he is entitled to resile from that withdrawal.
Mr. Park is not prohibited from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario.
Each party shall bear its own expenses.
Mr. Park is not liable to pay Wawanesa the amount of $3,000 under section 282(11.2) of the Insurance Act.
The pre-hearing tentatively scheduled for April 16, 2004 is vacated.
EVIDENCE AND ANALYSIS:
Summary of decision:
In summary, I conclude that Mr. Park withdrew the arbitration application on or about January 28, 2003. I dismiss Wawanesa's motion for orders dismissing the arbitration, prohibiting Mr. Park from commencing any further arbitration applications, and for an award in respect of its assessment. Each party will bear its own expenses. On April 14, 2004, I provided the Applicant and the Insurer with my decision, with reasons to follow. The following are my reasons:
History of the proceedings:
In November 2002, in light of the approaching expiry of a limitation period in relation to Mr. Park's claims for statutory accident benefits, the firm of Zuber, Levin, Zeldin filed an application for arbitration on behalf of Mr. Park with the Financial Services Commission of Ontario claiming benefits under sections 14, 22 and 46 of the Schedule. At about the same time, that firm also commenced a court application in relation to Mr. Park's claims for statutory accident benefits.
On January 8, 2003, counsel for the Applicant advised the Commission that the firm no longer represented Mr. Park, and that Mr. Park had retained Mr. Daniel J. Holland at the firm of Benson, Percival, Brown.
On January 9, 2003, Wawanesa by its counsel filed a Response to the Arbitration Application. In the Response, Wawanesa raised a jurisdictional question under section 50 of the Schedule, disputed the merits of Mr. Park's entitlement to benefits, and claimed its expenses of the arbitration.
At some point, Wawanesa demanded that Mr. Park withdraw the arbitration application on the basis that he had also commenced a court action in relation to statutory accident benefits. On January 28, 2003, Mr. Holland wrote to the Commission confirming his advice to the case administrator that the application for arbitration had been withdrawn, as a Statement of Claim had been issued against Wawanesa for statutory accident benefits. The Commission then closed Mr. Park's file.
Wawanesa wished a refund of the filing fee of $3,000 from the Commission. This was not forthcoming. According to the case administrator's note of February 12, 2003, she informed Mr. March, counsel for Wawanesa, that he would have to bring a motion for terms and conditions of the withdrawal.
On February 20, 2003, Mr. March wrote the Commission and requested that the application for arbitration be withdrawn and sought a refund of Wawanesa's $3,000 filing fee. Alternatively, if the filing fee could not be refunded, Wawanesa wished a determination of its entitlement to expenses and an award in respect of its assessment. Wawanesa alleged that the entire application was frivolous, vexatious and an abuse of process within the meaning of section 282(11.2) of the Insurance Act. There is no indication that Mr. March's letter was copied to counsel for the Applicant or to Mr. Park.
On April 14, 2003, Mr. Park's lawyer wrote the Commission, Mr. March and to three other counsel to advise that "because of a conflict of interest, I have asked Mr. Park to seek new counsel. I understand he is in the process of retaining same." I infer that the three other counsel represent parties in other civil actions which involve Mr. Park.
On May 13, 2003, the Commission issued a Notice of Pre-hearing setting a pre-hearing date of May 29, 2003. I find that under Rule 9 of the Dispute Resolution Practice Code, Mr. Holland remained counsel of record and was entitled to notice of the pre-hearing. However, the Notice was not sent to Mr. Holland.
On May 29, 2003, the pre-hearing commenced at 10:00 a.m. Wawanesa's representative and its counsel were present. Neither Mr. Park nor his counsel were present. I attempted to reach Mr. Holland by telephone, was informed that he was out of the office and the pre-hearing did not appear in his book. I attempted to reach Mr. Park by telephone but was unsuccessful.
Mr. March sought Orders dismissing the arbitration, prohibiting Mr. Park from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario, requiring Mr. Park to pay Wawanesa's expenses in the amount of $1,500 and an award in respect its assessment in the amount of $3,000 under section 282(11.2) of the Insurance Act.
I expressed my concern that there was no indication that Mr. Park's counsel had been served, and that there would have been no indication to the Applicant that many of the orders Wawanesa requested in its oral motion would be sought at the pre-hearing. Mr. March submitted that Mr. Park had notice of the pre-hearing, and had not attended. He submitted that he relied on the general purposes of the pre-hearing as the basis for notice of his oral motion, and stated that he wished to proceed with his motion in any event.
When Mr. March submitted that Mr. Park's failure to withdraw the arbitration application was evidence of the vexatious nature of the arbitration proceeding, I noted that there was a letter in the arbitration file dated January 28, 2003, from Mr. Park's counsel, advising that the application for arbitration had been withdrawn, and showed the letter to Mr. March. Mr. March stated that he had not seen the letter. There is nothing in the letter which indicates that it had been sent to Wawanesa or its counsel.
I rejected Mr. March's submission that the usual purposes of a pre-hearing would encompass the relief Wawanesa sought. In the circumstances, I adjourned the matter, wrote to Mr. Park and to his counsel, advised them of Wawanesa's motion and sought submissions by June 30, 2003.
On June 6, 2003, Mr. Park wrote to advise that he had not attended the pre-hearing because he had been in Korea because his elder brother had been hospitalized there. He advised that he left Toronto for Korea on May 8, 2003 and had returned to Toronto on June 5, 2003. I am advised by the case administrator that Mr. Park attended at the Commission, brought his airline ticket and travel documents, showed them to her, and that she was satisfied that Mr. Park had been out of the country during the dates he stated. Since the pre-hearing notice was dated May 13, 2003, I find it unlikely that Mr. Park received the notice of the pre-hearing before his departure.
Mr. Park's submissions were not received by June 30, 2003, the due date. I am advised by the case administrator that she spoke with Mr. Park in follow-up on July 2, 2003, and that he informed her that he had retained a lawyer who would provide his submissions.
On July 2, 2003, the Commission received a letter from Mr. T. Reybroek, of Todd A. Reybroek, Barristers, advising that he had been retained and wished time to obtain the file so that he could properly respond to Mr. March's submissions. The pre-hearing resumption was rescheduled to October 10, 2003, on consent.
On October 2, 2003, Mr. Park delivered a letter to the Commission advising that his lawyer had telephoned him on September 29, 2003, informed him that he was no longer prepared to take his accident benefits case, and that as a result he was looking for a new lawyer to represent him.
Mr. Reybroek's office indicated that the firm would be seeking an order removing it as counsel of record on October 10, 2003. Counsel for Wawanesa was not prepared to consent to an adjournment to allow Mr. Park to retain new counsel.
Shortly before the October 10, 2003 pre-hearing, case administrators at the Financial Services Commission of Ontario received telephone messages from Mr. Park advising that he was in Korea and was seeking an adjournment of the pre-hearing on that basis. Counsel for the Insurer was not prepared to consent to an adjournment on this basis. A Commission staff member who is fluent in Korean spoke with Mr. Park's mother in Toronto to obtain a telephone number at which Mr. Park could be reached in Korea for the pre-hearing. Counsel were informed of this development and advised that they could also participate in the pre-hearing by teleconference call. The Commission arranged for an interpreter to attend at Mr. Park's request.
On October 10, 2003, Ms. L. Kiley appeared as counsel on the motion to remove the Todd A. Reybroek law firm as Mr. Park's representative. Ms. Kiley submitted that there had been a fundamental breakdown in communication between Mr. Park and that office. Mr. Park opposed the removal request. Wawanesa took no position on the motion.
It became clear that a major difference between Mr. Park and his counsel was whether Mr. Park would transfer all of his personal actions to that firm. Mr. Park only wished that firm to act in relation to his claims for accident benefits, while the firm was only prepared to take his case if he transferred all of his personal actions — his accident benefits claims, tort claim in relation to the motor vehicle accident, a slip and fall claim and a malpractice claim — to that office. Mr. Park reluctantly agreed that the firm would no longer represent him in the arbitration, and consented to the removal of the Todd A. Reybroek firm as counsel.
Mr. Park was unclear when he would return to Toronto and when he would be able to retain counsel. He stated that he was in Korea because his uncle, the elder brother of his father was ill and might pass away; by tradition he had duties to perform and was required to be in Korea. Mr. Park identified Adair, Morse as a law firm with which he had spoken and/or corresponded by e-mail. I ordered Mr. Park to inform the Commission by October 17, 2003 of his new counsel or whether he would be representing himself.
On October 16, 2003, Mr. Park wrote the Commission indicating that he thought Mr. Neil J. Perrier of the Adair, Morse firm would handle his accident benefits claims after he obtained his files and would be in touch later. I wrote Mr. Perrier outlining the issues and canvassing the dates in 2004 which Mr. March had suggested. Mr. Perrier wrote back that he had not as yet been retained by Mr. Park. As the later of the dates Mr. March had suggested approached, the case administrator confirmed with Mr. Perrier's office on March 5, 2004, that he still had not been retained by Mr. Park.
On March 5, 2004, I wrote to the Applicant and to counsel for Wawanesa scheduling timelines for receipt of Mr. Park's submissions and reply if any by Wawanesa, and, if my decision was that Mr. Park could proceed to a pre-hearing, a tentative date for the pre-hearing requested by Mr. Park. Mr. Park's submissions were due on March 19, 2004.
Mr. Park did not provide submissions, however, on March 17, 2004, he wrote Mr. March and the case administrator "As you know, we are going to be the pre-hearing discussion on Friday, April 16, 2004, at 10:00 am by teleconference. I will proceed to arbitration in Financial Services Commission of Ontario's Schedule. Also, I would like to find my legal rights in law for accident benefits. Have a wonderful day. Yours truly, Chung Jin Park."
Although Mr. Park did not provide submissions, counsel for the Insurer purported to provide reply submissions. I find the purported reply submissions improper. There was nothing to which Wawanesa could reply. Among other problems, the submissions argue new grounds, and, at points they are inaccurate. Further, there is no indication that these submissions were provided to the Applicant.
Reasons:
Mr. Park's counsel withdrew the arbitration application by his letter dated January 28, 2003. Ordinarily, counsel have full authority in relation to an arbitration proceeding and parties are bound by the decisions of counsel. I find that Mr. Park is bound by the withdrawal.
The question then becomes one of the terms and conditions on which the withdrawal may be permitted. The terms Wawanesa sought were orders dismissing the arbitration, prohibiting Mr. Park from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario, payment of Wawanesa's expenses and payment of the amount of its filing fee.
I find Mr. Park has had ample opportunity to provide submissions in relation to Wawanesa's motion of May 29, 2003 and has not yet done so. In this decision I therefore deal with Wawanesa's motion without the benefit of Mr. Park's evidence or submissions.
Wawanesa sought a dismissal of the arbitration. Rule 68 of the Dispute Resolution Practice Code permits me to dismiss a proceeding without a hearing only where the proceeding is frivolous, vexatious or commenced in bad faith.
In the case of Imalele and Zurich Insurance Company (FSCO A98-000531 July 19, 1999), Arbitrator Hale, held that "frivolous" means that it must relate to a claim which is "trivial or inconsequential." "Vexatious" means designed primarily to inconvenience the Insurer and to cause it unnecessary expense. I find no evidence that would support a finding that the claim is trivial or inconsequential. Similarly, I find no evidence that the proceedings were commenced with the primary purpose of causing inconvenience or unnecessary expense. I also find no evidence that the proceeding was commenced in bad faith.
In Catlos and Jevco2 Arbitrator Bayefsky stated that "a finding that an applicant has abused the Commission's process should not, in my view, be made lightly. Neither Rule 66.3 nor section 282(11.2) is a general expenses provision. More must be shown than that an insurer has incurred costs in the course of the proceeding. An applicant must have pursued the matter for an improper purpose. His or her conduct must have been contemptuous of the arbitration process." That decision was upheld on appeal by Director's Delegate Draper, as he then was.
Wawanesa failed to file any evidence on the motion with respect to the scope of the court proceeding, but relied instead of submissions by counsel for the Insurer. I do not have evidence that the claims in both fora are identical to his claims raised in the arbitration. For these reasons, Wawanesa's motion to dismiss these arbitration proceedings is denied.
Prohibition request
Wawanesa sought an order prohibiting Mr. Park from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario. I am not persuaded that there is a basis for granting such relief. I find the scope of the order sought overly broad. Such an order would for example, prevent Mr. Park from accessing the arbitration process in relation to a subsequent accident even if it involved a different insurer.
EXPENSES:
Wawanesa sought its expenses in the amount of $1,500.
I exercise my discretion to deny Wawanesa its expenses of the motion due to its lack of success on the motion.
I am satisfied that up until October 2003, Mr. Park requested adjournments for legitimate reasons and took steps to retain counsel. Because of his unexplained delay between October 2003 and March 2004, and the absence of any submissions with respect to the relief claimed by Wawanesa on the motion, I exercise my discretion to deny Mr. Park his expenses in relation to Wawanesa's motion. In the result, each party will bear its own expenses.
An Award of the Insurer's Assessment Fee
Wawanesa seeks an order requiring Mr. Park to pay its filing fee of $3,000 pursuant to subsection 282(11.2) of the Insurance Act. That subsection permitted an arbitrator to order an insured person to pay an amount up to $3,000 to an insurer, if the arbitrator finds that the Applicant "commenced an arbitration that was frivolous, vexatious or an abuse of process."
At the time Wawanesa first sought the Order, the provision was still in force. For the reasons given earlier, I am not persuaded that this arbitration was frivolous, vexatious or an abuse of process, and would not therefore make an award in Wawanesa's favour. By the time Mr. Park's submissions were due, the provision permitting an arbitrator to make an award in respect of an insurer's assessment had been repealed and I no longer had the authority to make such an award. Accordingly, I dismiss Wawanesa's request for an order in respect of its assessment.
October 13, 2004
Suesan Alves Arbitrator
Neutral Citation: 2004 ONFSCDRS 152
FSCO A03-000149
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
CHUNG JIN PARK
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mr. Park withdrew the arbitration application through his counsel by letter dated January 28, 2003.
Wawanesa's motion for orders dismissing the arbitration, prohibiting Mr. Park from commencing any other accident benefits arbitration applications at the Financial Services Commission of Ontario, and for an award in respect of its assessment under section 282(11.2) of the Insurance Act, are all dismissed.
Each party shall bear its own expenses.
The pre-hearing tentatively scheduled for April 16, 2004 is vacated.
October 13, 2004
Suesan Alves Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.
- Catlos and Jevco Insurance Company (OIC A96-000183 February 7, 1997), confirmed on appeal (OIC P97-00013, September 26, 1997)