Financial Services Commission of Ontario / Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 46

FSCO A06-001680

BETWEEN:

COLIN SCOTT AKEHURST

Applicant

and

AVIVA CANADA INC.

Insurer

DECISION ON A MOTION FOR INTERIM BENEFITS

Before: John Wilson

Heard: January 9, 2007, at the offices of the Financial Services Commission of Ontario in Toronto and by subsequent written submissions.

Appearances:

Sandra L. Shaw for Mr. Akehurst

Karla Gnanasegaram and Robert H. C. Barrett for Aviva Canada Inc.

Issues:

The Applicant, Colin Scott Akehurst, was working as a timber framer at the time that he was injured in a motor vehicle accident on April 19, 2002. Despite some attempts to return to work, he claims to be unable to resume employment in any suitable occupation, and remains unemployed. Aviva is no longer paying him any of the income replacement benefits that he has claimed.

The parties were unable to resolve their disputes through mediation concerning ongoing entitlement to accident benefits, and Mr. Akehurst applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the pre-hearing in this matter, which took place of January 9, 2007, Mr. Akehurst requested a hearing date as early as possible, preferably commencing in May of 2007. Counsel for the Insurer was unavailable until much later. Indeed, the early dates first suggested by counsel for the Insurer were about a year from the date of the pre-hearing. Mr. Akehurst, through his representative, reiterated that he wanted and, indeed, needed an early hearing date since he was already a significant time without benefits, and wished a prompt resolution of his claim.

Counsel for Aviva was adamant that Mr. Barrett would be handling the hearing, and that his agenda was completely full until almost the new year. Aviva was not willing to consider a change of counsel, nor even to consider the use of alternative counsel in Mr. Barrett's office in an effort to advance the hearing dates.

While counsel for the Insurer was able to ultimately find an available date in November 2007, Mr. Akehurst insisted on an earlier date and suggested that in the event that an early hearing date was not set, he claimed reinstatement of benefits pending the hearing as a reasonable condition for setting the later date.

Given the novelty of the proposed condition I decided that Aviva should have an opportunity to reply on a more complete basis. Since the scheduling request itself was more time-sensitive than the requested condition, I made a decision to fix the date of the arbitration, while reserving on any conditions to be attached to my order.

With the unusual nature of Mr. Akehurst's request, the limited information available to me at the pre-hearing and in fairness to the responding party, I requested that Mr. Akehurst bring his request in the form of a formal written motion pursuant to section 65 of the Dispute Resolution Practice Code – 4th Edition.

The issue on this motion is:

1. Is Mr. Akehurst entitled to interim benefits pursuant to section 279(4.1) of the Insurance Act by reason of the delayed hearing date proposed by the Insurer?

Result:

1. Aviva shall pay Mr. Akehurst interim benefits commencing May 1, 2007 at the rate of $400 per week pending the final decision in the arbitration hearing.

EVIDENCE AND ANALYSIS:

Timeliness is a central concern of the accident benefit process and the related dispute resolution process. The Introduction to the Dispute Resolution Practice Code (4th edition, Updated – October 2003) (the Practice Code), which governs arbitrations at the Commission, notes that our procedural rules aim to promote "timely, cost-effective and fair dispute resolution services." [emphasis added] The Practice Code¹ provides that:

7. An Application for Arbitration in FORM C will be registered and assigned to an arbitration case administrator within 5 business days of receipt of an Application completed in accordance with Rule 25.1.

8. Dates for holding an arbitration pre-hearing discussion (Rule 33) will be available to the parties within 6 to 8 weeks from the registration of a completed Application for Arbitration.

9. Dates for holding an oral arbitration hearing will be available to the parties within 4 to 6 months from the conclusion of the pre-hearing discussion.

10. An oral arbitration hearing is generally concluded within 3 days.

11. An arbitration order from an oral hearing will be issued within 60 to 85 days from the conclusion of the oral hearing.

Thus, according to the Practice Code, an insured may reasonably expect a ruling on benefit entitlements in less than a year from the commencement of the arbitration process.

Section 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter. It reads as follows:

The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator.

While there may be practical similarities between the results achieved by an interim order, and those achieved by a court ordered injunction, the roots and parameters of such orders are markedly different. An interim award owes its basis only to the Insurance Act, not to equity or the Courts of Justice Act. Like a special award (section 282(10)), it is a remedy that is specific to the arbitration process.

Provided that an application for arbitration has been made, and an arbitrator has been appointed to hear the issues in dispute, the arbitrator is permitted by statute to make an award pending the final disposition of the matter. There is no statutory pre-condition other than the existence of an arbitration, the appointment of an arbitrator and, presumably, the willingness of the arbitrator to exercise his or her jurisdiction.

Since the statute does not define what is meant by an "interim order"², it has been left to individual arbitrators to develop a framework to exercise this broad discretion. While there has been some controversy concerning the nature and the effect of any pre-conditions to the making of an interim order, there is very little dispute that such an award from time to time may assist in promoting the goals of the accident benefit scheme itself by ensuring prompt payment of accident benefits pending the final disposition of a matter.

Eberhard J., in Gill v. Zurich, 1999 CanLII 36826 (ON SC), [1999] O.J. No. 4333 at p.14, made the following comments on the purposes of the statutory accident benefit scheme:

I adopt the statement of purpose articulated by Arbitrator Mackintosh at page 12 in Edgar v. Wellington Insurance Co. [1994] O.I.C.D. No. 34 File A-005441 that SABS is remedial, that is to be interpreted in a broad and liberal way, and that its principal object is to provide a "fair and adequate income stream to those who are injured and disabled from work". The victim is to receive an approximation of wages, and not be compensated more or less.

In deciding whether or not the "prompt payment" of benefits should be ordered by way of an interim order under section 279(4.1), an arbitrator has discretion to consider many different factors. Some of these have already been addressed in arbitral jurisprudence.³

If the hearing is some time distant, and the need is present, an interim order may well be appropriate to ensure that the public policy principles alluded to by Eberhard J. are respected and that any prejudice resulting from a late hearing is addressed.

Section 23(1) of the Statutory Powers Procedure Act (SPPA), (which governs arbitrations at the Commission, also provides:

A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

While the SPPA does not define "abuse of process", the Court of Appeal in Canam v. Coles has stated:

Abuse of process is a discretionary principle that is not limited by any set number of categories. It is an intangible principle that is used to bar proceedings that are inconsistent with the objectives of public policy.⁴

Goudge J.A in the above matter emphasised that it "engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation."

Hence an arbitrator has further and alternative discretionary jurisdiction to make interim orders in a matter pursuant to the SPPA where there is an action by one or more parties that can be construed as an abuse or is "inconsistent with the objectives of public policy."⁵

In arbitrations at the Commission, the practice in scheduling arbitrations has been generally that:

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.⁶

Usually this practical approach has much to recommend it. In Mr. Akehurst's case, as in some others, however, there is a tension between this mechanism for setting hearing dates and the goals of the legislative scheme itself as expressed in Rule 1 of the Practice Code.

In this matter, Mr. Akehurst maintains that the availability of the Insurer's chosen counsel should not automatically trump his right to an early and swift determination of his benefit entitlement. Consequently, he has requested that at a minimum, his income replacement benefits be reinstated as a pre-condition to accepting the hearing timing proposed by Aviva.

While there may well be authority to make limited interim orders without any reference to the merits of a party's claim where there has been a serious abuse, or in the context of an adjournment, the need to exercise any discretion judicially, suggests that at least some analysis of the context of the requested order should be undertaken.⁷

The documents submitted in support of Mr. Akehurst's motion include various expert medical reports including DAC reports, orthopaedic assessments, as well as letters from his treating physicians.

While the DAC in May 2003 concluded that Mr. Akehurst "would not be able to perform the essential job duties as a carpenter/framer of timber and log homes", a post-104 week DAC on June 30, 2004 found that he was able to work as a framer, despite "physical impairments in the cervical and thoracic regions" and "some limitations with respect to work tolerance in the medium to heavy range."

A second post-104 week DAC took place in January 2005. While the DAC noted Mr. Akehurst's symptoms and complaints, the assessor concluded: " ...while the recent findings clearly alter his management course, I do not feel that they influence the precise position taken by the DAC in 2004 regarding his employability."

After the DAC Mr. Akehurst continued however to suffer from headaches and pain in his neck as well as the base of his skull. He was taking strong painkillers (oxycodone) at this time. He was then referred by his physician to a neurologist and a neurosurgeon. Although the neurosurgeon referenced a malformation that could have been related to the headaches, neither physician noted any serious neurological abnormality. Surgery (aposterior fossa craniectomy, laminectomy, posterior fossa decompression and a fascialata graft) took place in Toronto in February.

A report from a Dr. Basil Johnston, one of the DAC assessors, on March 17, 2005 remarked:

Despite the fact that this man had a congenital abnormality, it was evidently asymptomatic and he was able to satisfy the requirements of a fairly heavy job for at least 10 years prior to the accident event.

Despite attempts to work at lighter duties subsequent to the surgery, Mr. Akehurst apparently found that he was unable to work on any sustained basis, complaining of severe fatigue, excruciating headaches and neck pain.

While I am not in a position at this point in the process to assess either the reliability of each individual medical opinion as to Mr. Akehurst's ultimate disability, or the correctness of the opinions expressed, the impression received from a review of the materials submitted by both sides is that Mr. Akehurst sustained serious injuries that apparently interacted in some way with a pre-existing asymptomatic condition. Mr. Akehurst's assertion that there is a medical foundation for his disability claim, and that given the time that has passed since his accident and the non-payment of income replacement benefits, a further delay in the adjudication of his case would be unfair, merits serious consideration.

Indeed, if I were to accept the summary evidence provided in support of Mr. Akehurst's motion at face value, there could be little doubt that Mr. Akehurst would be entitled to the benefits that he has requested. He has provided evidence that, if accepted, could support a finding of entitlement to the accident benefits claimed. At the very least, even taken in the light of Aviva's evidence and submissions, the medical evidence would easily support a finding that, in the words of Zalev J., Mr. Akehurst's claim "is not frivolous or vexatious and there is a serious question to be tried."⁸

Were I to consider Mr. Akehurst's application without reference to the surrounding circumstances that led to this motion, I would still find that his motion met the higher criteria for a free-standing interim benefit motion outlined in Nguyen and State Farm⁹ and I would grant his motion for interim benefits.

However, in this case, the circumstances that led up to the presentation of this motion and the circumstances that now lead me to accept this motion are more than just Mr. Akehurst's need for benefits on an urgent basis to address his disabilities.

This motion arose in the context of a conflict between the practice in setting hearing dates on consent and the stated aims of the dispute resolution system of providing prompt resolution of disputes. More specifically, it was because of the inability or the unwillingness of one party to comply with the goal that hearings be set "4 to 6 months from the conclusion of the pre-hearing discussion."

I accept that an interim order in this matter will further the accident benefit system's fundamental goal of ensuring "prompt payment of benefits for an injured person's medical and vocational rehabilitation, their care or their day-to-day financial support"¹⁰ by encouraging the parties to adhere to the Commission's goal of providing timely hearings and early awards.

Neither Aviva nor any other insurer should be able to override the declared timing goals of the dispute resolution process at the Commission and frustrate the aims of the accident benefit scheme, merely by choosing a solicitor who has no time in his schedule to attend a hearing within a reasonable period. It is the insured who is intended to drive the timing of the dispute resolution process, not the insurer's choice of counsel.¹¹

It is neither just nor convenient that an insured should bear all of the negative consequences of an insurer's choice of counsel.

Having scheduled the matter for the dates requested by the Insurer, I find it both fair and appropriate to order that any prejudice to the Applicant be addressed by an interim award of income replacement benefits pending the hearing of this matter.

Given that Mr. Akehurst was ready to proceed with a hearing as of May 2007, I find that May 1, 2007 would be an appropriate starting point. Since the amount claimed by Mr. Akehurst is $400 per week, and the Insurer's submissions took no issue with his quantum in the interim claim, the order should go in that amount.

As with most interim orders at the Commission, the amounts paid under this order shall be repayable in the event that Mr. Akehurst is unsuccessful at the hearing of his substantive claim.

EXPENSES:

The question of expenses will be left to the hearing arbitrator.

March 27, 2006

John Wilson Arbitrator

Date

Financial Services Commission of Ontario / Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 46

FSCO A06-001680

BETWEEN:

COLIN SCOTT AKEHURST

Applicant

and

AVIVA CANADA INC.

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Aviva shall pay Mr. Akehurst interim benefits commencing May 1, 2007 at the rate of $400 per week pending the final decision in the arbitration hearing.

2. The will be no order as to expenses.

March 27, 2006

John Wilson Arbitrator

Date

Footnotes

1. 1Practice Code Introduction at p.13
2. 2Black's Law Dictionary, 8th Edition, defines "interim" as "Done, made, or occurring for an intervening time; temporary or provisional..."
3. 3See the discussion in Nguyen and State Farm Mutual Automobile Insurance Company (FSCO A05-000305, December 22, 2005)
4. 4Canam Enterprises Inc. v. Coles 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (Ont. C.A.)
5. 5Canam (supra)
6. 6Blum and Aviva Canada Inc. (FSCO A02-001375, June 9, 2004)
7. 7Zalev J. in Samoila v. Prudential of America General Insurance Co. [1999] O.J. No. 2317, appears to imply that a consideration of whether the Applicant's case was "frivolous or vexatious" would be useful but, in the face of what he viewed as an abuse of the mediation process, he was prepared to make an interim order pending trial on the basis of it being "just and convenient" notwithstanding his comment that "It is impossible for me to say what view the trial judge will take of the evidence of the plaintiff and Lelacheur, assuming that they testify at the trial." It is of some note that the Court of Appeal specifically approved of Zalev J.'s approach in Fernandes: (Liberty Mutual Insurance Co. v. Fernandes 2006 CanLII 30212 (ON CA), [2006] O.J. No. 3514)
8. 8Samoila v. Prudential of America General Insurance Co. [1999] O.J. No. 2317
9. 9Nguyen and State Farm Mutual Automobile Insurance Company (FSCO A05-000305 December 22, 2005)
10. 10Director's Delegate Naylor in Sebastian v. Canadian Surety Co., [1998] O.F.S.C.I.D. No. 130 (O.F.S.C.)
11. 11The Court of Appeal has recognized the unique role played by an insured in this dispute resolution scheme. "By leaving the choice of forum always with the insured, the legislature has guaranteed that the insured maintains control of the process including its timing and cost." Fernandes (supra)