Neutral Citation: 2004 ONFSCDRS 163
FSCO A03-000698
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
PRAMOD BALI
Applicant
and
AXA INSURANCE (CANADA)
Insurer
REASONS FOR DECISION
Before:
Robert A. Kominar
Heard:
January 19, 20, 21, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Naresh Misir for Mr. Bali
Linda Matthews for AXA Insurance (Canada)
Issues:
The Applicant, Pramod Bali, was injured in a motor vehicle accident on May 17, 2001. He applied for statutory income replacement accident benefits from AXA Insurance (Canada) ("AXA"), payable under the Schedule.1 AXA refused to pay those benefits. The parties were unable to resolve their disputes through mediation, and Mr. Bali applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issues in this hearing are:
Is Mr. Bali entitled to receive a weekly income replacement benefit pursuant to section 4 of the Schedule?
Is AXA liable to pay Mr. Bali's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Bali liable to pay AXA's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Bali entitled to interest on the overdue payment of benefits pursuant to section 46(2) of the Schedule?
Is Mr. Bali liable to pay an amount to AXA that does not exceed the amount assessed against AXA in respect of the arbitration, pursuant to subsection 282(11.2) of the Insurance Act, because he commenced an arbitration that is frivolous, vexatious or an abuse of process?
Result:
Mr. Bali is not entitled to receive an income replacement benefit.
AXA is not liable to pay Mr. Bali's expenses in respect to the arbitration.
Mr. Bali is liable to pay AXA's expenses in respect to the arbitration.
Mr. Bali is not entitled to interest on overdue payments.
Mr. Bali is not liable to pay AXA an amount not exceeding its assessment in this arbitration.
BACKGROUND:
This matter came on for an arbitration hearing on January 19, 2004. Mr. Bali had originally retained Mr. Justin Mariani, a paralegal representative who operates as Global Accident Claims, to represent him in his claim for accident benefits. The date of the accident giving rise to these claims was May 17, 2001. Through Mr. Mariani's office Mr. Bali applied for mediation of his unresolved income replacement benefit dispute with AXA in February 2002 and the Mediator reported that the mediation had failed on April 25, 2002. Mr. Mariani's office subsequently applied for arbitration in May 2003. The arbitration pre-hearing was conducted at FSCO on July 22, 2003 and the pre-hearing arbitrator reported that Mr. Bali participated in that process. The pre-hearing letter deals with the usual procedural and production issues and set the hearing to commence on January 19, 2004.
REQUEST FOR ADJOURNMENT
At the commencement of the hearing I was advised that Mr. Bali was no longer represented by Mr. Mariani of Global Accident Claims. Mr. Naresh Misir, legal counsel, appeared with Mr. Bali on the morning of January 19, 2004 and advised that he had taken over carriage of the file and would be conducting the arbitration. Mr. Misir then requested that the arbitration be adjourned to allow him to obtain and file additional documents to support Mr. Bali's claim for entitlement to income replacement benefits and to challenge the calculations that AXA's accountants had made of the quantum of income replacement benefits Mr. Bali would theoretically be entitled to receive. Ms. Matthews, counsel for AXA, objected to the adjournment, noting that no request for adjournment in accordance with the Dispute Resolution Practice Code, Practice Note 9, had been made, and that AXA was prepared to proceed with the arbitration.
Practice Note 9 states in the relevant part:
Requests for adjournments will only be granted in three circumstances:
in cases of personal emergencies, such as serious illnesses or deaths in the family
for valid reasons relating to the hearing itself, such as an imminent settlement, or medical or other critical evidence that is UNAVOIDABLY delayed
when a lawyer is involved in a trial or other proceeding that was scheduled to conclude before the start of the Commission proceeding and which has continued or been held over into the time scheduled for the Commission proceeding
Adjournments will normally be refused if they do not fall into one of the three categories mentioned above. Common circumstances in which adjournments are refused include the following:
where the parties have not made reasonable efforts to comply or delayed their compliance with undertakings and orders made at the pre-hearing
where the parties have not made early arrangements to ensure availability of documents or the attendance of witnesses . . .
Practice Note 9 also goes on to provide a procedure for formally requesting an adjournment in writing, generally at least 7 days prior to the hearing.
I invited Mr. Misir to make submissions on the grounds supporting his adjournment request. He advised that since he had only recently been retained by Mr. Bali it was not possible for him to have provided the requisite written notice for an adjournment and that if there were problems they were the responsibility of Mr. Bali's former representative, Mr. Mariani. Mr. Misir also advised that he had believed, at one point in time, that AXA itself would be requesting that the hearing be adjourned and he had relied on this. In essence, Mr. Misir's position, as I understand it, is that his recent retainer started the procedural clock running again, and any delay in obtaining or producing relevant evidence should not be laid at the feet of Mr. Bali personally, but, if anywhere, at those of his former representative, Mr. Mariani.
Ms. Matthews submitted in response to Mr. Misir's argument that the situation was more convoluted than Mr. Bali suddenly deciding to retain legal counsel on the eve of the arbitration. She argued that Global Accident Claims, Mr. Mariani, Mr. Zubin Zarolia, Mr. Naresh Misir, and Misir & Company Barristers and Solicitors appear to be interrelated in some way and that each of these individuals and firms has, in fact, appeared on behalf of or represented Mr. Bali at various stages of the continuum of the FSCO dispute resolution process. Consequently, she submitted, it was difficult for Mr. Misir to credibly argue on Mr. Bali's behalf that he should not have been aware of the reality of the situation because he was freshly retained.
The relevant aspects of the Commission's adjournment policy require me to consider whether Mr. Bali and his representatives have made reasonable efforts to comply with production orders and undertakings given at the pre-hearing and whether early arrangements had been made to make sure the information needed to support Mr. Bali's claim for benefits would be available at the hearing. If the information needed for the hearing is UNAVOIDABLY delayed, an arbitrator may consider granting an adjournment.
Having considered the arguments made on behalf of Mr. Bali and AXA, I declined to grant the adjournment as no evidence was provided to me that there was an unavoidable delay in obtaining the financial information, other than delay on the part of Mr. Bali or his legal representatives. I find that the delay in complying with production undertakings and securing the evidence was, in fact, completely avoidable.
FAILURE TO COMPLY WITH SECTION 33 OF THE SCHEDULE AND RULE 39 OF THE DISPUTE RESOLUTION PRACTICE CODE
Having ruled that the arbitration would proceed, Ms. Matthews advised that AXA wished to first deal with the preliminary issue that Mr. Bali was, throughout the claim, in breach of his obligations under section 33 of the Schedule, to provide information to AXA that was reasonably required to assess his claim for benefits. In addition, she submitted that Mr. Bali should not be allowed to rely on financial evidence in the arbitration that he only recently provided to AXA, contrary to Rule 39 of the Dispute Resolution Practice Code. I will deal with these two distinct issues together as they are intertwined in this specific case.
The only substantive issue in dispute in this arbitration relates to Mr. Bali's entitlement to an income replacement benefit, and the quantum of that benefit, for the period from one week post accident through November 2001, at which time Mr. Misir conceded that Mr. Bali's entitlement would have ended due to his return to work.
It is trite to observe that an insurer requires some basic financial information to properly assess a claim for entitlement to an income replacement benefit and to calculate the proper quantum of that benefit if entitlement is established. When applicants are self-employed, as Mr. Bali is, it is often the case that the insurer needs more information to calculate an income replacement benefit than if an applicant is not self-employed. Section 33 of the Schedule requires an applicant for a benefit to provide to the insurer any information that is reasonably needed to assess entitlement to the benefit claimed. It then goes on to provide that an insurer is not liable to pay a benefit in respect of any period of time during which the insured person fails to comply with the obligation to provide such information. AXA's position is that Mr. Bali has been in complete and continuous breach of his obligations under section 33 and hence, for the period of time in question, AXA was not obligated to pay any income replacement benefit to Mr. Bali.
Correspondence from Mr. Misir to Ms. Matthews reflects that Mr. Bali's 2000 and 2001 tax returns were produced to AXA on or about January 7, 2004. Another letter from Mr. Misir to Ms. Matthews, dated January 16, 2004, notes that it includes the Notices of Assessment for those two taxation years. Following upon the production of this information to AXA there is correspondence between Mr. Misir and Ms. Matthews regarding a possible adjournment of the arbitration to allow the newly provided material to be reviewed by AXA's accountants, BDO.
From that correspondence it appears that Mr. Misir was indeed expecting Ms. Matthews to request an adjournment and that he was caught by surprise when that did not happen. Mr. Misir wrote to the Commission on January 13, 2004, advising that he was requesting an adjournment of the arbitration and that the request was opposed by AXA. On January 16, 2004, the arbitrator dealing with adjournments for the week wrote to the parties confirming that Mr. Misir wished his request for an adjournment be determined by the hearing arbitrator on January 19, 2004 rather than by the arbitrator designated to deal with adjournments for that week.
After I declined to grant the adjournment, Mr. Misir advised that he was seeking leave to have the recently produced tax documentation admitted in evidence, so that it could be used to challenge the Report prepared for AXA by the accounting firm BDO. Ms. Matthews submitted that Mr. Bali should not be allowed to introduce or rely on this evidence at the arbitration because Mr. Bali had not complied with Rule 39.3 of the Dispute Resolution Practice Code. That Rule says in its relevant parts:
39.3 The hearing arbitrator will determine the relevance, materiality, and admissibility of evidence submitted at the hearing, but will not admit evidence at the hearing that:
(a) would not be admissible in a court by reason of any privilege under the law of evidence; or,
(b) is not admissible under the Insurance Act; or,
(c) was not served on the opposing party in accordance with Rules 39.1 and 39.2, unless the hearing arbitrator is satisfied that extraordinary circumstances exist to justify an exception.
In order to support the claim that an exception was in order here due to extraordinary circumstances, Mr. Misir took the rather unusual step of calling Mr. Bali's two prior legal representatives, Mr. Mariani and Mr. Zarolia, to give evidence as to why the tax and financial information had not been produced earlier in the process. This evidence dealt both with the failure to provide the evidence to AXA throughout the claim and the failure to produce it in time to have it properly admitted as evidence in the arbitration hearing.
Mr. Zarolia testified that he now works with Misir & Company as a lawyer. The Report of Mediator in this dispute notes that Mr. Zarolia represented Mr. Bali at the time of the mediation but that he was at that time a law student working for the paralegal firm Global Accident Claims. Mr. Zarolia also is recorded as having attended with Mr. Bali at the arbitration pre-hearing. However, Mr. Zarolia testified that he did not "represent" Mr. Bali on either of those occasions. His explanation during his evidence of his professional role was that he was an agent for Global Accident Claims "for the moment." I have to note that is it difficult to understand the exact nature of the relationships between Mr. Bali's representatives, as Mr. Zarolia, a lawyer at least at the time of the arbitration pre-hearing, purported to be acting only as an agent of a paralegal firm, that was acting as agent for Mr. Bali. This seems to be inconsistent with the pre-hearing letter which describes Mr. Zarolia's participation in the pre-hearing as that of legal counsel representing Mr. Bali. This may have been an error, but Mr. Zarolia apparently took no steps to have the pre-hearing arbitrator amend the pre-hearing letter if his role as counsel had been inaccurately described. However, given Mr. Zarolia's further evidence of the relationship he had with Global Accident Claims, it is understandable, even if not acceptable, that he took no steps to have the pre-hearing letter amended.
The consequences of this unusual form of representation, in Mr. Zarolia's mind, were that he was not responsible for following up on the file or even knowing what was in the file. Mr. Zarolia testified that it is Mr. Mariani's practice to hire various people, including lawyers, to fill in for him as needed, often at the last moment, in FSCO dispute resolution processes. Thus, even though Mr. Zarolia would most likely have learned at the mediation, and had it reinforced at the arbitration pre-hearing, that AXA needed and continued to request financial information from Mr. Bali, Mr. Zarolia took no steps to follow up on providing that information after his "for the moment" advocacy engagements ended. His understanding was that Mr. Mariani's office would do so.
Mr. Mariani remained Mr. Bali's representative of record in the arbitration, and apparently retained control of the file until approximately a week or two prior to the hearing's commencement. When asked about complying with agreements regarding productions, Mr. Zarolia stated that he believed that they were probably waiting for "authorizations" for this information to be provided by AXA, so that AXA could obtain the information for itself. Upon further questioning by Ms. Matthews, Mr. Zarolia acknowledged that, for much of the information AXA was requesting, no "authorizations" of any sort were needed, and in fact all Mr. Bali needed to do was to ask his accountant for the information.
Mr. Mariani gave evidence describing the normal file handling practices of his office. He stated that he prided himself on the systems he had in place that allowed him to run a very busy and successful paralegal practice. He also stated that his usual practice was to agree to provide authorizations to an insurer to obtain the relevant information it wanted in an arbitration and he did not understand why there was any obligation on his part, or Mr. Bali's part, to take any further active steps to produce information under their control to the Insurer.
Mr. Mariani was confronted by Ms. Matthews with a long list of correspondence, from both AXA and BDO, requesting information about Mr. Bali's financial situation. He testified that he had no documentation that could support that he ever responded to any of AXA's or BDO's numerous letters requesting production of this information. He did recall telephoning BDO at one point to express his concern that the demands being made by the accountants on Mr. Bali were "onerous and malicious." Mr. Mariani did not specify what it was that the accountant was asking for that warranted the use of either of these forceful adjectives. However, he did say that Mr. Bali was a simple person who used "shoe box accounting" and so the kinds of formal records that accountants often request to see were either unavailable or too expensive to prepare. I find it significant that Mr. Mariani did not testify that, in response to what he regarded as onerous production demands being made on his client, he provided what he thought was reasonable and then took steps to challenge the rest. Rather, he chose to produce nothing at all and offered no explanation for this.
Mr. Mariani did not deny that, at a minimum, AXA was entitled to receive tax returns and notices of assessment to calculate the quantum of an income replacement benefit. All of Mr. Bali's representatives in this matter are experienced in doing accident benefit work. Mr. Mariani's only explanation for this long lapse in providing information to AXA was that he assigned Mr. Bali the duty of securing this information from his accountants himself. However, Mr. Mariani did not follow up with Mr. Bali when the information was not secured and when AXA continued to write to him to request it. I note that AXA started to copy Mr. Bali personally with correspondence after it detected a pattern in Mr. Mariani's non-responsiveness. This was notwithstanding the fact that Mr. Bali executed a direction to have all correspondence dealing with his accident benefits claim sent solely to Mr. Mariani's office. Although this was a prudent course of action for AXA to take, as it served to notify Mr. Bali that something needed to be done to advance the consideration of his claim for benefits, it nevertheless ended up not having any practical effect. Neither Mr. Bali nor his representatives responded to AXA until Mr. Misir became involved just prior to the arbitration hearing, approximately two and a half years after the claim was initiated.
There is a clearly discernable pattern of inaction in the representation Mr. Bali had up to the point where Mr. Misir took over the file. Prior to that he was represented either by Mr. Mariani or by Mr. Zarolia, who, at the relevant times, was either employed by Mr. Mariani, or purported only to be his "agent for the moment." The net result of this arrangement was that Mr. Bali's former representatives did little to actively follow up on this file. I have no reason to believe that either Mr. Mariani or Mr. Zarolia intended to be less than professional in their representation of Mr. Bali. However, my conclusion after hearing their evidence is that there is a systemic organizational problem in the way they transfer work and responsibilities between each other. It would do them well to clarify the division of labour in their work arrangements, for their sakes, and more importantly for their clients' sakes. Arbitrators in the future may need to consider inquiring more fully into the nature of legal representation where there is reason to believe that the person who is on record may not actually conduct the arbitration, or the person who attends at pre-hearings intimates that he or she is not actually "representing" the applicant.
Mr. Bali also gave evidence. His evidence confirmed that he has actually had some formal training in business and that he knows what tax returns are as well as notices of assessment. He stated that he believed that his accountant had responded to AXA's requests for information. However, he was unable to identify any occasion when he ever checked to see if that was the case, either with the accountant, or for that matter with Mr. Mariani's office.
Mr. Bali was involved with this claim from the beginning and I find that there were multiple occasions where it was, or reasonably should have been drawn to his attention that AXA needed to be provided with specific financial information to allow them to assess and calculate his claim for an income replacement benefit.
Specifically, I find that:
Mr. Bali most likely knew that this information was required from him and that he was advised of that by Mr. Mariani's office after he retained them;
Mr. Bali knew from numerous letters AXA sent to him, as well as from follow up correspondence from both AXA and BDO, that AXA required this information;
Even if Mr. Bali did not understand the content of these letters, it would have been reasonable for him to contact Mr. Mariani's office after receiving them to ask what they meant and what was required of him;
Mr. Bali participated in the mediation and that he knew or ought to have known after the mediation that the material was still outstanding;
Mr. Bali knew or ought to have known at the time he signed the Application for Arbitration that he had still not provided the information that AXA had been requesting;
Mr. Bali definitely should have known that there continued to be a need to produce information as a result of AXA's Response to the Application for Arbitration, which unequivocally specifies that its accountant needs information that had not yet been provided;
Mr. Zarolia's evidence was that he reminded Mr. Bali after the pre-hearing that he needed to provide this information to AXA; once again, nothing was done to make this happen either by Mr. Bali or Mr. Mariani.
Mr. Bali also stated in his evidence-in-chief that he thought that he had to provide "all or nothing" of the information BDO had requested. He was however unable to offer any explanation as to how he arrived at this conclusion. In general, I find this belief to be implausible. There was no evidence presented that Mr. Bali ever consulted with Mr. Mariani or Mr. Zarolia about whether his interpretation of this matter was correct. Global Accident Claims was representing Mr. Bali throughout this matter. I cannot accept that, in the face of the ongoing stream of requests by AXA that he provide this relevant and necessary information, Mr. Bali would not even once consult with his legal advisers to ask whether he ought to provide some of what was requested if he could not provide it all.
I agree with Ms. Matthews' submission that Mr. Bali simply did not take any active interest in his claim for income replacement benefits, at least until the eve of the arbitration hearing. If Mr. Bali's legal representatives were actively monitoring his file and preparing his case for arbitration, this hands-off approach on his part might have ended up differently. But Mr. Bali has to accept some responsibility in this situation as well. He chose to retain the representatives that he did. He is accountable for his choices. It is important to respect the choices people make in legal representation, and it is not the role of the arbitrator to probe behind those choices in normal circumstances. When Mr. Bali was copied with the repeated requests for information and did nothing to follow up with either his accountant or with Mr. Mariani, he must assume the responsibility for the consequences of that inaction on his part. Mr. Bali testified that for unexplained reasons he decided to "go with the lawyers" sometime in late December 2003 and, as a result, he retained Mr. Misir. Something clearly spurred him to take action at that point in time, however, in my judgement, the action he took was too little and much too late.
The argument that Mr. Bali's representatives were patiently waiting for "authorizations" is spurious and although I accept that this is likely what they were actually "doing", I do not accept that it constitutes reasonable grounds for explaining the way this file was handled throughout the dispute resolution process.
It is not unknown for insurers to agree to obtain the information they need by having the applicant execute authorizations for the release of information by third parties directly to the insurer - there is however no requirement that an insurer agree to this procedure and in many cases they do not. The production process is a two-way street. Both parties have active obligations to produce early on in the arbitration process the relevant documentary evidence that they will rely on during the hearing and they are encouraged to work collaboratively to prepare a joint book of productions for use at the hearing if possible. Although applicants and their representatives may prefer not to engage in the work of gathering the information needed to support their claims, if the insurer does not agree to proceed by way of authorizations the applicant still has the obligation to satisfy production agreements, undertakings and orders.
There was no evidence led in this arbitration that AXA ever agreed to proceed by way of authorizations in this case. I find that the consistent and enduring stream of correspondence from AXA to Mr. Mariani and Mr. Bali requesting the production of this information is in fact significant evidence to the contrary. I also find that Mr. Mariani's inability to produce any correspondence supporting his belief that there was such an agreement, as opposed to a mere preference on his part to proceed by way of authorizations, also best supports an inference that no such agreement was actually made. I do accept that Mr. Mariani's normal office practice was to work by way of authorizations whenever possible. If insurers agree to it, then it is often a sensible thing to do. However, unilaterally maintaining that executing authorizations is all that will be done to comply with production requirements is not sufficient to comply with an applicant's responsibilities in the arbitration process.
The burden of proof in this arbitration rests on Mr. Bali to demonstrate on the balance of probabilities that he is entitled to the income replacement benefits he is claiming and to present evidence to support his calculation of the proper quantum if he is disputing the calculations AXA made. In essence, at the eleventh hour, Mr. Misir is arguing on behalf of Mr. Bali that the persistent pattern of ignoring repeated requests for information for over two years should somehow reflect negatively on AXA for not going out and collecting the information needed to support Mr. Bali's case when his own representatives chose not to do so. Although arbitration is not the same procedurally formal process as adversarial litigation, it is still incumbent on parties to an arbitration to collect and present evidence to support their claims. Tactical brinkmanship is to be avoided, as arbitrators have said in the past, and early and full exchange of relevant information is encouraged in order to promote a less adversarial, more efficient and more well informed dispute resolution process than litigation often provides. Mr. Bali and his former representatives are completely responsible for the state of their case on the opening day of the arbitration and I find that they have no reasonable grounds to deflect any of the responsibility for their plight onto AXA.
The most plausible explanation for the conduct evidenced here is that Mr. Mariani, and perhaps also Mr. Bali, believed that this matter would ultimately settle and only when it did not, did Mr. Bali have to retain a legal representative who would actually conduct the arbitration hearing for him. This was certainly Mr. Bali's choice to make in consultation with his representatives, but it is manifestly unfair to AXA to allow Mr. Bali to gamble on settling his claims in this way and then be granted a last-minute adjournment to provide evidence that he could and should have provided long ago, or grant him leave to file evidence out of time simply because he finally realized that he would actually have to prove his case at an arbitration. This is stereotypical brinkmanship, and is not something that the FSCO arbitration process encourages or rewards.
But beyond that, there is an even more important practical dimension to this problem. If Mr. Bali had provided AXA with the information it had been requesting, it may well have enhanced the possibility of settling this claim on a mutually acceptable basis. I do not comprehend how Mr. Bali or his representatives could reasonably have believed that AXA would likely be willing to resolve this claim for income replacement benefits without having the very basic background information it had been repeatedly requesting. One of the key elements of good conflict resolution is listening, and it is clear that Mr. Bali and his representatives were not listening to AXA. If their goal was settlement they should have listened and responded to what was asked of them. Thus, if Mr. Bali was harmed here, to a large degree the wounds were self inflicted or the result of "friendly fire."
I heard no evidence from Mr. Zarolia, Mr. Mariani or Mr. Bali that satisfies me that Mr. Bali has any reasonable explanation for not providing the requested information to AXA earlier than January 2004. I reject as implausible Mr. Bali's suggestion that his accountant was away at some unidentified location for some indefinite period of time and that an unnamed person working in the office was not authorized to give him what he wanted. It was open to Mr. Bali to summons this other person, who worked for his accountant, to support this claim. He and Mr. Misir chose not to do this. I believe it is reasonable to infer that the decision not to call this witness leads to the conclusion that this person would not have offered any assistance to Mr. Bali.
As a result of the evidence I heard, I am prepared to draw the adverse inference Ms. Matthews invited me to that Mr. Bali did not actually take any steps to have his accountant provide this information. If there was any record of correspondence between Mr. Bali's accountant, one Mr. Balal, and Mr. Bali or his representatives, it would have gone a long way toward supporting Mr. Bali's claims that he reasonably believed that the accountant was taking care of providing this information to the Insurer. Not only was such evidence not produced, there was no evidence it was even requested by anyone, leading me to the inference that it does not exist.
AXA had been requesting this information for over two years. The tax documents could have been obtained from Revenue Canada long before they were if Mr. Bali could not secure them from his accountant, but again neither Mr. Bali nor his representatives followed up on this until Mr. Misir became involved. There is no evidence before me that would explain why, at the absolute latest, this information was not provided to AXA in compliance with Rule 39 of the Dispute Resolution Practice Code. If Mr. Mariani did not intend to be Mr. Bali's advocate at the arbitration hearing, he ought to have recognized that the file should have been transferred to someone else early enough not to risk prejudicing Mr. Bali's claims.
If Mr. Bali was having trouble obtaining this information, or incurring onerous costs in producing it, as both he and Mr. Mariani testified, I would have expected to see some correspondence with AXA about this. None was offered in evidence. However, having reviewed the list of requests being made by BDO, I find that most of it is rather basic bookkeeping information and tax returns. I am not persuaded that anything on the list was unduly onerous for Mr. Bali to provide. And even if it was a challenge for Mr. Bali, I find that it was his responsibility to make that problem known to AXA. Communication has the potential to resolve many problems. He could also easily have reconvened a pre-hearing discussion to seek guidance from an arbitrator as to what had to be produced and in what format if the parties could not come to an agreement. This was not done, once again reflecting the passive approach taken by the Applicant in this claim.
CONCLUSION
Given that Mr. Bali concedes that the only period during which he may have met the disability test for income replacement benefits ended in November 2001, and given that I have found that Mr. Bali was not in compliance with his obligations under section 33 of the Schedule regarding that benefit up until January 2004, I find that even if Mr. Bali would have been entitled to the benefit, AXA is not responsible for paying it during the period he failed to produce reasonable information to support his claims. The income tax returns are the bare minimum that should have been provided to AXA, and I find that, in addition to them, the Insurer requested other relevant and readily available information that Mr. Bali acknowledged he had but decided not to provide. I further find that even if the tax returns had been provided earlier than they were, there still would have likely been questions about their adequacy to calculate an income replacement benefit based on his self-employed status.
I find that Mr. Bali is not entitled to submit his 2000 and 2001 tax returns as evidence in this arbitration due to his continuous failure to serve and file them pursuant to Rule 39 of the Dispute Resolution Practice Code. Additionally, I also specifically find that there are no extraordinary circumstances that would justify me in admitting them into evidence notwithstanding this breach.
I further find that Mr. Bali was in breach of his obligations under section 33 of the Schedule for the period of time that he was claiming income replacement benefits and that, even if evidence were submitted that met the burden of proving entitlement to an income replacement benefit, AXA is not responsible for paying such a benefit for any time prior to Mr. Bali providing his tax returns in January 2004, which is past the date which the parties agree any entitlement would have ceased due to his return to work.
Mr. Bali's claim for income replacement benefits is therefore dismissed as is his claim for interest on overdue benefits.
AXA's claim for a return of its assessment is dismissed, based on section 282(11.2) being repealed in the recent amendments to the Insurance Act. I find that I have no jurisdiction to make such an award under the current statute.
EXPENSES:
There was no merit in proceeding to arbitration in this matter. AXA was put to the expense of preparing for and conducting this hearing needlessly. I award AXA its expenses in the arbitration. The parties have 30 days to agree on the quantum of expenses. If no agreement is reached, an expense hearing may be scheduled through the case administrator and I will decide the issue.
November 9, 2004
Robert A. Kominar
Arbitrator
Date
Neutral Citation: 2004 ONFSCDRS 163
FSCO A03-000698
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
PRAMOD BALI
Applicant
and
AXA INSURANCE (CANADA)
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mr. Bali's claims for income replacement benefits, expenses and interest are dismissed.
AXA shall be entitled to its expenses. The parties shall have 30 days after the date of this decision to agree on expenses. If no agreement is reached an expense hearing can be arranged.
AXA's claim for a return of its assessment fee is dismissed.
November 9, 2004
Robert A. Kominar
Arbitrator
Date
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.