Ian Puran v. Primmum Insurance Co., 2004 ONFSCDRS 63

Neutral Citation: 2004 ONFSCDRS 63

FSCO A03-001708

BETWEEN:

IAN PURAN

Applicant

and

PRIMMUM INSURANCE CO. (FORMERLY CANADA LIFE CASUALTY)

Insurer

DECISION ON A MOTION

Before:

Catherine Skinner

Heard:

March 15, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received on March 31, April 2 and April 6, 2004. The Hearing was resumed on April 22, 2004 by teleconference.

Appearances:

Brian Sherman for Mr. Puran

Derek Greenside for Primmum Insurance Co. (formerly Canada Life Casualty)

Issues:

The Applicant, Ian Puran, was injured in a motor vehicle accident on July 28, 1999. He applied for statutory accident benefits from Primmum Insurance Co. (formerly Canada Life Casualty) ("Primmum"), payable under the Schedule.¹ Disputes arose amongst the parties and Mr. Puran 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:

Should Mr. Puran's application for arbitration be dismissed?
Is Primmum entitled to a return of its assessment fee of $3000?
Is Primmum entitled to its arbitration expenses?

Results:

Mr. Puran's application for arbitration is dismissed.
There is no jurisdiction to order a return of Primmum's assessment fee of $3000.
Mr. Sherman, Mr. Puran's representative, is ordered to pay Primmum its arbitration expenses fixed in the amount of $150.

EVIDENCE AND ANALYSIS:

The parties agree that Mr. Puran's application was filed in error. They agree that the application relates to claims that have not yet been mediated or appear to be time barred. Mr. Puran's representative, Mr. Sherman, acknowledged that the application was filed with the Commission as a result of an administrative error in his office. The issue before me is Primmum's motion for a dismissal of the application for arbitration brought under Rules 67 and 68 of the Dispute Resolution Practice Code. Primmum also seeks its expenses and a return of the $3000 assessment fee.

The chronology of events leading up to this motion hearing is as follows: On December 4, 2003, Mr. Puran filed his application for arbitration at the Financial Services Commission of Ontario. On December 12, 2003, Primmum wrote to the Commission and to Mr. Sherman, pointing out the deficiencies in Mr. Puran's application. On January 16, 2004, Primmum submitted a response to Mr. Puran's application, again pointing out the deficiencies in the application for arbitration. At the same time, Primmum brought a motion for an order dismissing Mr. Puran's application for arbitration. The motion was scheduled for a hearing on March 15, 2004. On March 12, 2004, Mr. Sherman wrote to Mr. Greenside, counsel for Primmum, indicating his intention to withdraw the application for arbitration.

The parties agree that Mr. Sherman did not receive Primmum's correspondence of December 12, 2004 because Primmum sent the letter to Mr. Sherman's old address.

I find in the circumstances that Mr. Puran's application should be dismissed pursuant to Rules 67 and 68 of the Dispute Resolution Practice Code. The Commission has no jurisdiction to arbitrate issues that have not yet been mediated. The parties agree that this application should not proceed.

Primmum seeks a return of its $3000 assessment fee. Section 282(11.2) of the Insurance Act, which allowed an arbitrator to order the return of the assessment fee on a finding that the insured commenced an application that was frivolous, vexatious or an abuse of process, was repealed on October 1, 2003. I am not authorized to order Mr. Puran to pay Primmum's assessment fee.

As I understand it, Mr. Sherman submits that the Commission should be responsible for the refund of the insurer's assessment fee. He relies on Rule 25.4 of the Disputes Resolution Practice Code which provides that the Commission may advise an applicant of apparent flaws or deficiencies in the application when it is first received. If the applicant fails to satisfy the concerns or correct the deficiencies, an arbitrator may reject the application.

Rule 25.4 of the Practice Code does not provide me with jurisdiction to order the return of the insurer's assessment fee. Mr. Puran's application does not fall within the circumstances contemplated in Rule 25.4. Mr. Puran's application was not rejected before Primmum filed its response and it is not now available to me to reject Mr. Puran's application under this provision. I find I do not have jurisdiction to order the Commission to return Primmum's assessment fee. Should Primmum wish to pursue this matter, it must do so through administrative, rather than adjudicative, channels.

Primmum also seeks its expenses. Rule 75.1 of the Practice Code provides me with jurisdiction to award either party its expenses. Rule 75.2 sets out the criteria for consideration in determining whether to award expenses. The relevant criteria in this case are the conduct of a party or a party's representative that tended to prolong the proceeding and the question of whether any aspect of the proceeding was improper or unnecessary.

Having regard to these criteria, I find that Mr. Puran is responsible for Primmum's expenses in this matter. Mr. Sherman submits that expenses should not be ordered because Primmum had an opportunity to correct this situation but mailed correspondence to an incorrect address . Primmum's failure to use the correct address does not negate Mr. Sherman's and Mr. Puran's role in filing this application. It was Mr. Sherman's initial error which caused the application to be filed. It would not be reasonable to require Primmum to bear the entire financial burden of Mr. Sherman's administrative error.

The current subsection 282(11.2) of the Insurance Act allows arbitrators to order a representative to pay all or part of any expenses awarded against a party if the representative caused expenses to be incurred without reasonable cause. I find in this case that Mr. Sherman caused expenses to be incurred on behalf of Primmum without reasonable cause. Mr. Sherman is personally responsible for payment of Primmum's arbitration expenses, fixed at $150.

Although Primmum sought its expenses in a much larger amount, I have awarded nominal expenses to reflect Primmum's role in prolonging this matter by sending correspondence to Mr. Sherman at an incorrect address, despite Mr. Sherman's current address being noted on the application for arbitration. I also do not find a large award of expenses is justified at this early stage in the proceeding.

April 30, 2004

Catherine Skinner Arbitrator

Date