Neutral Citation: 2004 ONFSCDRS 39

FSCO A02-001155

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SIAMAK SHALCHI-AMIRKHIZ

Applicant

and

BELAIR INSURANCE COMPANY INC.

Insurer

DECISION ON A MOTION

Before:

William J. Renahan

Heard:

February 20, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Mr. Shalchi-Amirkhiz on his own behalf

Katherine E. Kolnhofer, Barrister and Solicitor, for Belair Insurance Company Inc.

Issues:

The Applicant, Siamak Shalchi-Amirkhiz, was injured in a motor vehicle accident on August 6, 2001. He applied for statutory accident benefits from Belair Insurance Company Inc. ("Belair"), payable under the Schedule.¹ Belair refused to pay. The parties were unable to resolve their disputes through mediation, and Mr. Shalchi-Amirkhiz applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Mr. Evan Ismaeli signed Mr. Shalchi-Amirkhiz's Application for Arbitration as his representative. The Application indicates that Mr. Ismaeli is not a lawyer.

This is an application by Mr. Ismaeli, pursuant to Rule 9.7 of the Dispute Resolution Practice Code, 4th Edition, May 31, 2000 (the "Code") for an order permitting him to withdraw as representative. Mr. Ismaeli did not attend. Mr. Shalchi-Amirkhiz appeared and provided written consent to Mr. Ismaeli's withdrawal. Ms. Kolnhofer asked for an order that Mr. Ismaeli, pay Belair $5,000 for costs and expenses to date together with the $3,000 assessment fee, which Belair paid to respond to this Application for Arbitration.

The issues in this hearing are:

May Mr. Ismaeli withdraw as representative, and if so, upon what terms?
Whether I should order Mr. Ismaeli to pay all or any part of the expenses awarded against Mr. Shalchi-Amirkhiz?

Results:

Mr. Ismaeli may withdraw as representative.
Mr. Ismaeli shall pay $1,500 to Belair.

EVIDENCE AND ANALYSIS:

Mr. Shalchi-Amirkhiz consented to the withdrawal of Mr. Ismaeli and I therefore, permit Mr. Ismaeli to withdraw. The question is whether I should order Mr. Ismaeli to pay any part of the expenses awarded against Mr. Shalchi-Amirkhiz.

Effective October 1, 2003, section 282(11.2) of the Insurance Act was repealed² and substituted with a new provision which allows an arbitrator to make an order requiring a person representing an insured person or an insurer to personally pay all or part of any expenses awarded against a party. The Superintendent of the Financial Services Commission issued a Code of Conduct for Statutory Accident Benefit Representatives effective November 1, 2003.

It is presumed that legislation is not intended to have a retroactive application.³ The rationale is explained in Driedger On The Construction of Statutes as follows:

Because a retroactive law applies to past events, its practical effect is to change the law that was applicable to those events at the time they occurred. To change the law governing a matter after it has already passed violates the rule of law. In fact, it makes compliance with the law impossible. ... , the fundamental tenet on which the rule of law is built is that in order to comply with the law, or rely on it in a useful way, the subjects of the law have to know in advance what it is. By definition, a retroactive law is unknowable until it is too late.⁴

The authors of Driedger on the Construction of Statutes distinguish between the application of legislation to facts which have ended before it comes into force, to facts which begin after it comes into force and to facts which start before the legislation comes into force and continue after the legislation is in force.

The application of legislation to ongoing facts is not retroactive because, to use the language of Dickson J. in the Gustavson Drilling case 1975 CanLII 4 (SCC), [1977] 1 S.C.R. 271, there is no attempt to reach into the past and alter the law or the rights of persons as of an earlier date. The application is prospective only to facts in existence at the present time. Such an application may affect existing rights and interests, but it is not retroactive.⁵

Mr. Ismaeli's conduct in this application for arbitration started before October 1, 2003 and continued after that date. Therefore, the application of section 282(11.2) to that conduct is not retroactive and I will therefore consider all of Mr. Ismaeli's conduct in this proceeding.

On March 10, 2003, Arbitrator Bayefsky conducted a pre-hearing in which he ordered Mr. Shalchi-Amirkhiz to produce certain documents to Belair. He scheduled a hearing to commence July 28, 2003.

On June 10, 2003, at the request of Belair, Arbitrator Bayefsky reconvened the pre-hearing by teleconference and repeated the production order, and ordered Mr. Shalchi-Amirkhiz to pay Belair $500 as expenses of the reconvened pre-hearing.

A few days before the commencement of the scheduled hearing, Mr. Ismaeli requested an adjournment due to a personal emergency of the Applicant. Arbitrator Bayefsky, convened a teleconference on July 25, 2003 to deal with the adjournment request. In his reporting letter, he noted that Mr. Shalchi-Amirkhiz participated. He granted the adjournment to December 1, 2003 on certain terms: Mr. Shalchi-Amirkhiz was to provide Belair with his "airline tickets showing his trip to Vancouver"; satisfy production orders; and, pay Belair a further $500 as expenses of the pre-hearing.

At this motion, Mr. Shalchi-Amirkhiz testified that he was not aware of the teleconference, did not attend at Mr. Ismaeli's office for the teleconference, did not have to go to Vancouver, and wanted to get on with his hearing.

On November 3, 2003, Arbitrator Bayefsky heard an application by Belair for an order dismissing the arbitration because of lack of productions from Mr. Shalchi-Amirkhiz. No one appeared for Mr. Shalchi-Amirkhiz. The arbitrator stayed the arbitration pending Mr. Shalchi-Amirkhiz's compliance with the production order. He also ordered that Mr. Shalchi-Amirkhiz pay a further $500 to Belair as expenses of the motion.

The Senior Arbitrator assigned the hearing scheduled to commence December 1, 2003 to me. Since it was stayed, no one appeared. The file contained a letter from Mr. Ismaeli dated November 24, 2003 to the Commission which indicated that he no longer represented Mr. Shalchi-Amirkhiz. I treated the letter as a request by Mr. Ismaeli to withdraw as representative and advised the parties that the request was denied because Mr. Ismaeli did not provide either Mr. Shalchi-Amirkhiz's consent or grounds for the requested withdrawal.

I received a further letter from Mr. Ismaeli dated December 5, 2003 which included a document signed by Mr. Shalchi-Amirkhiz on November 17, 2003 in which he consented to Mr. Ismaeli withdrawing. The letter was copied to Ms. Kolnhofer and she responded that she wanted the matter dealt with at a hearing to address her claims that Mr. Ismaeli had violated the Code of Conduct for Representatives. She also noted that the letter dated November 17, 2003, was purportedly copied to me before my involvement in the file.

On December 29, 2003, I wrote to Ms. Kolnhofer, with copies to the other participants, and advised them that the case worker would contact them to arrange a hearing at the Commission for me to determine whether I should permit Mr. Ismaeli to withdraw as representative. I wrote: "In view of your allegation that Mr. Ismaeli has violated the "Code of Conduct for Statutory Accident Benefit Representatives" I draw the participants' attention to section 282(11.2) of the Insurance Act. I then reproduced section 282(11.2).

Section 282(11.2) provides:

Liability of representative for costs

(11.2) An arbitrator may make an order requiring a person representing an insured person or an insurer for compensation in an arbitration proceeding to personally pay all or part of any expenses awarded against a party if the arbitrator is satisfied that,

(a) in respect of a representative of an insured person, the representative commenced or conducted the proceeding without authority from the insured person or did not advise the insured person that he or she could be liable to pay all or part of the expenses of the proceeding;

(b) in respect of a representative of an insured person, the representative caused expenses to be incurred without reasonable cause by advancing a frivolous or vexatious claim on behalf of the insured person; or

(c) the representative caused expenses to be incurred without reasonable cause or to be wasted by unreasonable delay or other default. 2002, c. 22, s. 127.

Non-application to solicitors

(11.3) Clause (11.2) (a) does not apply to a barrister or solicitor acting in the usual course of the practice of law. 2002, c. 22, s. 127.

Opportunity to make representations

(11.4) An order under subsection (11.2) shall not be made unless the representative is given a reasonable opportunity to make representations to the arbitrator. 2002, c. 22, s. 127.

I accept the testimony Mr. Shalchi-Amirkhiz gave on this motion. I find that Mr. Ismaeli made a number of deliberate misrepresentations to this tribunal and to Belair. He misrepresented that Mr. Salchi-Amirkhiz was in attendance at the teleconference which took place on July 25, 2003. He misrepresented that Mr. Shalchi-Amirkhiz wanted an adjournment because of an emergency when in fact Mr. Shalchi-Amirkhiz wanted to get on with his hearing. He misrepresented that he had Mr. Shalchi-Amirkhiz's consent to his withdrawal prior to his first request to withdraw when he did not seek Mr. Shalchi-Amirkhiz's permission until after he made the request. As well, I find that Mr. Ismaeli failed in his duty to produce documents because he did not make any attempt to produce documents on behalf of his client. Mr. Ismaeli's conduct contravened sections 2.1, 2.2, 2.9, 2.11, 2.13 and 2.14 of the Code of Conduct for Statutory Accident Benefit Representatives.

Up to the time of this motion, Arbitrator Bayefsky had dealt with expenses by ordering Mr. Shalchi-Amirkhiz to pay Belair a total of $1,500. I find that the delay and wasted expenses was due to Mr. Ismaeli's conduct. Pursuant to section 282(11.2)(c) I order that Mr. Ismaeli pay Belair this amount.

Belair also asks for the return of the $3,000 assessment fee it paid to respond to the Application for Arbitration. The amount is not recoverable for two reasons. The section which authorized such an order in the case of frivolous, vexatious or abusive proceedings was repealed effective October 1, 2003. As well, the merits of this Application for Arbitration have not been decided.

I leave the costs of this motion to the hearing arbitrator.

The stay of proceedings continues pending compliance with the Orders of Arbitrator Bayefsky set out in his decision dated November 21, 2003.

March 22, 2004

William J. Renahan Arbitrator

Date