Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 131
FSCO A04-002722
BETWEEN:
RAY MCCORMACK
Applicant
and
AVIVA CANADA INC.
Insurer
DECISION ON A MOTION
Before: John Wilson
Heard: By way of written submissions received on July 13, 2005 and July 20, 2005.
Appearances: Gino Isabella for Mr. McCormack Grant R. Dow for Aviva Canada Inc.
Issues:
The Applicant, Ray McCormack, was involved in a motor vehicle accident on February 19, 2003. He applied for and received statutory accident benefits from Aviva Canada Inc. ("Aviva"), payable under the Schedule.1 The Insurer was able to resolve the principal outstanding dispute involving the payment of a treatment provider. Although the Insurer apparently had paid the treatment provider directly, Mr. McCormack applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended on that same and other issues, since he apparently believed that payment was outstanding.
At the pre-hearing of this matter Mr. Isabella, the agent acting on behalf of Mr. McCormack, conceded that the account of the treatment provider appeared to have been settled, and stated that his client wished to withdraw his application for arbitration without penalty.
Mr. Dow on behalf of Aviva would not concede a withdrawal without an order to pay Aviva's costs incurred in dealing with this matter.
Mr. McCormack has since brought a motion asking to withdraw his application.
The issue in this motion is:
- Is Mr. McCormack entitled to withdraw his Application for Arbitration without any conditions or award of expenses?
Result:
Mr. McCormack is entitled to withdraw his Application for Arbitration.
Aviva is entitled to its expenses which I fix at $1566, inclusive of GST.
Mr. Isabella, Mr. McCormack and Aviva have 30 days to advise the Commission whether they wish to make further submissions as to the issue of by whom this expense award shall be payable, in which case arrangements may be made for any further hearing that may be necessary.
If no such notification is received in the 30 days following the issuance of this decision, an order will go for expenses payable by Mr. McCormack, the named party.
EVIDENCE AND ANALYSIS:
Pursuant to Rule 70 of the Dispute Resolution Practice Code, a party may seek a withdrawal of a single issue or all issues in an arbitration. This may be granted on consent, made subject to terms and conditions, or may be refused entirely if appropriate. An arbitrator may also make an award on expenses as permitted by Rule 75.
In this matter, Mr. Isabella, the agent representing Mr. McCormack has requested an unconditional withdrawal, without expenses since, as he now concedes, the sole significant issue in this arbitration was resolved. He wishes a withdrawal without any penalty since he claims to have had no knowledge of the resolution until after the filing of the application for arbitration. He further claims to have been abetted in his ignorance by the Response filed in this matter by Aviva which failed to mention specifically that the monies had been paid directly to the establishment which had provided the treatment expenses to Mr. McCormack. Mr. McCormack also claims his unspecified expenses in this withdrawal application.
Aviva has taken the position that the matter was resolved prior to the filing for arbitration, and that consequently Mr. McCormack's application for arbitration was essentially an abuse of the arbitration process, since he should have known that the treatment issue had been resolved. As a result of Mr. McCormack's application, Aviva has been forced to retain counsel to respond and incur further costs to bring this matter to the pre-hearing stage.
As noted above, an arbitrator has the power to permit a withdrawal, subject to any conditions that are reasonable. I have no difficulty accepting that there is no reason to proceed with the arbitration. Indeed, there is no question that anyone wishes the procedure to continue. I have no difficulty making the necessary order permitting the withdrawal of the Application.
I also accept that on the face of the matter Aviva appears to have a valid grievance about having to face an arbitration application in a matter it considered settled. It is natural that it feels entitled to some compensation for its expenses in this matter.
There can be no dispute that information about the settlement of the medical benefit was communicated to the Applicant and his agent. The documents and letters filed as part of Aviva's case have not been contested.
Although Mr. Isabella claims to have been led on by the content of the Insurer's reply, I accept the uncontradicted evidence contained in Mr. Calin Lau's affidavit that he wrote to Mr. McCormack, on December 8, 2004, enclosing an OCF-9 documenting his actions to settle the Sports Injury Account. The face of the letter indicates that a copy was sent to Mr. Isabella at his office.
I also accept his assertion that he sent both a letter and fax on December 22, 2004 to Mr. Isabella repeating his assertion that the account of the Sports Injury Clinic had been settled.
The date shown on the Application for Arbitration is December 15, 2004. Correspondence from the Commission to Mr. Isabella dated December 24, 2004 indicates that the Application for Arbitration had been received by the Commission and was registered, effective that date.
There are two principal consequences for an insurer arising from the registration of an Application for Arbitration. In accordance with Rule 26 of the Dispute Resolution Practice Code, an insurer must file its Response within 20 days of its receipt of the Application.
The Insurer