Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 19

FSCO A04-001451

BETWEEN:

CARMELINA TAGHIVAND

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION ON A MOTION

Before: John Wilson

Heard: By written submissions at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David Levy for Ms. Taghivand

Joan Takahashi for Royal & SunAlliance Insurance Company of Canada

Issues:

The Applicant, Carmelina Taghivand, was injured in a motor vehicle accident on May 13, 2000. She applied for statutory accident benefits from Royal & SunAlliance Insurance Company of Canada ("Royal"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Taghivand 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 motion were:

Ms. Takahashi requested:

An adjournment "until such time as that all production requests have been fulfilled";
An order compelling Ms. Taghivand "to provide all productions requested within seven (7) days of the date of this Order";
An order that the Applicant’s previous employer provide a complete employment file within seven days;
An order that Drs. Geoffrey Forbes and Miceli provide their complete notes and records within seven days; and
Costs of the motion to be paid by the applicant.

In Ms. Taghivand's responding materials, Mr. Levy requested:

"An adjournment of the Hearing so that the issue (catastrophic impairment) could be mediated"; and
That "the expenses of this motion should be awarded in favour of the Applicant".

Result:

An adjournment "until such time as that all production requests have been fulfilled" is denied.
An order compelling Ms. Taghivand "to provide all productions requested within seven (7) days of the date of this Order" is denied.
An order that the Applicant’s previous employer provide a complete employment file within seven days is denied.
An order that Drs. Geoffrey Forbes and Miceli provide their complete notes and records within seven days is denied.
Costs of the motion to be paid by the applicant are denied.

In Ms. Taghivand’s responding materials, Mr. Levy requested:

An adjournment of the Hearing so that the issue (catastrophic impairment) can be mediated is granted, subject to the provision of satisfactory alternative dates by both parties.
Ms. Taghivand is entitled to her costs (expenses.)

This motion arose because Ms. Takahashi, counsel for the Insurer was dissatisfied with the progress of counsel for Ms. Taghivand in responding to her requests for further productions. In addition to these production requests were requests that third parties (physicians and employers) to the proceeding be required to provide certain materials and a request for an adjournment to allow this to happen before the scheduled hearing dates.

The history of this matter is of some interest in evaluating the merit of Ms. Takahashi's requests. At the pre-hearing which took place on February 23, 2005, no production orders were made. The parties reviewed the material each was interested in obtaining and then, apparently satisfied with what they had in hand and what each understood they would receive, requested no production orders.

Unlike many cases where productions come into issue, the record and the materials filed, the correspondence file indicates that serious efforts were made to provide the materials requested by both sides. In addition, Ms. Taghivand’s affidavit material outlines the specific steps taken to fulfill her production obligations in this contentious matter.

EVIDENCE AND ANALYSIS:

Production orders are found in the Insurance Act, and the Statutory Powers Procedure Act (the "S.P.P.A."). Practice surrounding such orders is defined in the Dispute Resolution Practice Code (the "Code”) and arbitral jurisprudence.

Section 32.3 of the Code provides that:

An arbitrator may at any time order the production of any document or the giving of information that he or she considers relevant to the determination of the issues in the arbitration, on such terms as he or she considers appropriate.

Section 15 of the S.P.P.A. outlines evidence that is not admissible at hearings. Subsection 15(2) provides:

Nothing is admissible in evidence at a hearing,

(a) that would be inadmissible in a court of law by reason of any privilege under the law of evidence; or

(b) that is inadmissible by the statute under which the proceeding arises or any other statute.

Section 22 of the Insurance Act permits an arbitrator to exercise "the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Ontario Court (General Division) for the trial of civil actions."

The basic purpose of this motion is to persuade me to issue an order to compel the production of certain documents from Ms. Taghivand and various third parties, including treating physicians. Privilege is not an issue in this matter.

At issue in this arbitration are Ms. Taghivand’s entitlement to income replacement benefits, and her claim for a special award pursuant to subsection 282(10) of the Insurance Act on the grounds that the Insurer unreasonably withheld or delayed payment of the income replacement benefits.

The basic rule in arbitration is that every document that is relevant and probative, and not subject to an established privilege is producible. That is not to say that every document in the hands of a party must be produced. To allow a party an absolute right to inspect and receive production of each and every possible document in the possession, without exception, is to cast a net that is too wide. It risks turning what is meant to be a fast-track procedure into an expensive and unproductive paper transfer process.

To obtain an order mandating production, the person requesting that order must demonstrate that the document meets the test of relevance and probative value. While the bar is not necessarily very high at the production stage, something more than an empty affirmation of relevance must be put forth. It goes without saying that such motions should be brought as early in the process as possible.

This motion also involves adjournment requests from both parties, each for quite different reasons.

Unlike the traditional rule in the courts, the arbitration system is designed to work on strict time discipline.² Hearing dates are set on the consent of both parties, and are subject to revision only in cases of personal emergencies, the prospect of imminent settlement, or the unforeseen unavailability of critical evidence, or the involvement of counsel in an ongoing proceeding that was scheduled to conclude before the time scheduled for the arbitration. Barring the occurrence of circumstances such as those described above, they are expected to be able to proceed within the agreed time-frame. This is consistent with a system³ that is designed to be "quicker, less expensive and less formal"⁴ than the courts.

Given this fundamental aspect of the arbitration system, any request for an adjournment that will have the effect of further delaying the hearing process should be approached with caution. Practice Note 9, dealing with adjournments, recognizes the importance of this principle.

The pre-hearing notice, incorporating the practice at the Commission stated "(B)efore a pre-hearing discussion, the parties must exchange the documents that are reasonably necessary to determine the issues being arbitrated".

As noted, at the pre-hearing which took place on February 23, 2005, no production orders were made. Now, a short time before the hearing, Mrs. Takahashi wishes to revisit the question of productions. To a large degree the timing of the production motion brought by Ms. Takahashi is at issue.

Master Albert in Wright v. Wasilewski et al.⁵ commented:

Trial is one month away. The settlement conference was conducted on November 6, 2000. Rule 77.14(2) provides that all production and discovery must be completed before the settlement conference. This motion should have been brought before November 6, 2000.

Likewise in arbitration "(B)efore a pre-hearing discussion, the parties must exchange the documents that are reasonably necessary to determine the issues being arbitrated". Master Albert’s further commented:

Case management is designed to change the way in which law is practised. Fixed trial dates are provided to ensure that court resources are maximized and that counsel, parties and witnesses can rely on the dates fixed for trial. A production motion brought on the eve of trial places a fixed trial date in jeopardy. Extensions of time and delays are no longer automatic.

In order to meet the mandate to provide a "quicker, less expensive and less formal"⁶ process all arbitrations are case-managed to a greater or lesser extent. Relatively tight timelines govern the setting of dates, the production process and the hearing process. As in the case-managed stream in the courts, hearings are set down for fixed dates.

Late motions and adjournments in the arbitration forum as well as the courts risk throwing the process into confusion, causing delay and wasting resources. I see no reason why arbitration should be more receptive to delay and brinkmanship than the court system to which it is often compared. Indeed the opposite should be true.

Another serious problem in accepting the Insurer’s claim for production of any of the documents listed in the motion materials is that not the slightest scintilla of evidence as to the relevance and probative value of the documents was proffered. Nor were any submissions made as to these very fundamental pre-conditions for a production order. It is not simply a matter of an incomplete or insufficient evidence, but of the complete failure to supply any evidentiary support for the Insurer’s argument.

As touched on earlier, the request for productions involves others who are not parties to this matter. Specifically Royal requests that Ms. Taghivand's previous employer provide her employment records within seven days and an order that Drs. Geoffrey Forbes and Miceli provide their complete notes and records within seven days.

I have no evidence or admission that Ms. Taghivand has these documents. Nor is there a request that Ms. Taghivand merely provide consent to the release of the documents. Rule 67.7 of the Code provides a format for third-party production orders. The materials filed contain no suggestion that Royal or its counsel made the slightest effort to comply with these requirements.

Given also that section 34 of the Dispute Resolution Practice Code (4th Edition, Updated October 2003) provides specific remedies for non-production, none of which includes the adjournment of the arbitration, I would decline to order an adjournment on the basis of the non-production of the various documents referred to in the Insurer's motion.

As noted earlier, Mr. Levy also requested an adjournment of the hearing so that the issue of catastrophic impairment could be mediated. As early as the initial pre-hearing in this matter the problem of catastrophic impairment was identified as important.

In my pre-hearing letter, dated March 2, 2005, I recorded my observation that "Underlying all these issues is the basic question of whether Ms. Taghivand is catastrophically impaired." I also noted the delay in dealing with this issue and the approach taken by the Insurer to the provision of a catastrophic DAC assessment.

Ms. Taghivand claims to have suffered a catastrophic impairment as defined by the Schedule. The mediation report states that "the insurer agreed to arrange a CAT DAC". None has taken place to date.

At the pre-hearing, however, the insurer undertook to request a CAT DAC immediately.

Ms. Takahashi later clarified the position of the Insurer stating that it did not act on the request for a CAT DAC "as it believed that it was not in a position to refer the matter to a CAT DAC pending further information from the insured." The fact remained that a critical assessment was not arranged by an insurer, notwithstanding multiple requests and its obligations under the Schedule.

According to the material in Mr. Levy’s affidavit, on which the Insurer did not cross-examine, the CAT DAC was not held until spring of 2005, with the report being dated July 28, 2005. The responding report from Dr. Becker was dated October 4, 2005. The affidavit also reported that by October 28, 2005, he had formally requested that the Insurer consent to add catastrophic impairment as an issue. It is of some importance that the issue of catastrophic impairment had been before the mediator already, but was not listed in the mediator’s report as an issue remaining in dispute as of May 13, 2000 because "the insurer agreed to arrange a CAT DAC for this determination".

According to Mr. Levy's affidavit, the Insurer would only consent to adding catastrophic impairment if Ms. Taghivand agreed to a psychiatric assessment. Ms. Takahashi’s letter of November 22, 2004, which is attached to the affidavit adds "I will also require your undertaking that you will not object to the late service of Dr. Notkin's report." It is important to remember that the substantive hearing in this matter was scheduled to commence on January 9, 2006, some 6 weeks from the service of the notice of motion.

I accept that it was the Insurer's resistance to setting up a DAC assessment that delayed the bringing forward of the issue of catastrophic impairment, and consequently, the request to add the issue.

The subsequent refusal of the Insurer to consider adding catastrophic impairment is even more puzzling in light of its early identification as an issue, and the fact that at least some part of the issue had already been to mediation. Clearly it had failed to resolve, although that failure may have only been ascertainable retrospectively, when the insurer failed to carry through with its own undertaking. Whether the Insurer’s consent was required to formally add the issue or not, the position it took in delaying the assessment, and in refusing to consent to its addition in a timely manner served only to delay the entire arbitration and cause unnecessary additional expense to the Applicant.

Consequently, I find that Ms. Taghivand’s request to adjourn this matter must be accepted. I find as well that the underlying cause of this adjournment was the Insurer’s failure to deal promptly with the catastrophic DAC assessment, as well as its subsequent refusal to add the issue without a return to mediation.

EXPENSES:

Both parties requested that the expenses of this motion should be awarded in their favour. In the original order I granted Ms. Taghivand her expenses subject to Mr. Levy filing his bill of costs related to this motion by January 10, 2006. This was done. Ms. Takahashi subsequently informed me by letter that this issue had been settled between the parties, so I make no further order at this time.

February 1, 2006

John Wilson

Arbitrator

Date

Financial Services Commission of Ontario