Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 7

FSCO A04-001871, A05-000146 and A05-000725

BETWEEN:

MARYAN AHMED

ABDULKADIR ABDURAHMAN

ABSHIR ABDULLE-OMAR

Applicants

and

CERTAS DIRECT INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

John Wilson

Heard:

November 14, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Dimple Verma for Ms. Ahmed, Mr. Abdurahman and Mr. Abdulle-Omar

Amanda Magda for Certas Direct Insurance Company

Issues:

The Applicants, Ms. Ahmed, Mr. Abdurahman and Mr. Abdulle-Omar, were injured in a motor vehicle accident on August 6, 2003. They applied for statutory accident benefits from Certas Direct Insurance Company ("Certas"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Ahmed, Mr. Abdurahman and Mr. Abdulle-Omar applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

1. Should the arbitration applications of Ms. Ahmed, Mr. Abdurahman and Mr. Abdulle-Omar be combined pursuant to Rule 30 of the Dispute Resolution Practice Code?

Result:

1. The above arbitrations shall be heard by the same arbitrator, one immediately after the other.

EVIDENCE AND ANALYSIS:

The provisions of Rule 30 of the Dispute Resolution Practice Code read as follows:

Where two or more Applications for Arbitration have been filed and it appears that:

(a) they have an issue or question of law, fact, or policy in common; or

(b) the application of this Rule will result in the most just, quickest, and least expensive means to deal with the Applications;

The Dispute Resolution Group will notify the parties in writing of the intention to:

(c) combine the proceedings;

(d) schedule the proceedings to be heard at the same time;

(e) schedule one or more proceedings to be heard one immediately after the other by the same arbitrator; or

(f) suspend the scheduling of a proceeding or proceedings until the determination of any one of them.

Rule 6 of the Rules of Civil Procedure reads similarly and uses essentially the same criteria for the consolidation or hearing together of matters in the court system as Rule 30 does in the arbitration system.

In both systems, the starting point is whether there are multiple proceedings which share issues of law, fact or policy in common.

In this case, all claimants were involved in the same automobile accident, which took place on August 6, 2003. All were passengers in the same vehicle. According to the affidavit filed by the Insurer, all parties have claimed against Certas Direct, and all three applicants attended at Downsview Rehabilitation Centre for treatment. There apparently were other overlapping treatments including "similar service providers for housekeeping and caregiving."

The basic rule has always been that the plaintiff in a matter is dominus litem. He or she decides when and if an action is to be brought. He or she decides which issues shall be put before the tribunal. In the arbitration context, the importance of this principle is enshrined in section 281(1) of the Insurance Act which provides that only an insured may refer an issue to arbitration. Any decision which unnecessarily overrides the ability of an applicant to make tactical decisions about his or her claim impinges on this procedural advantage. The mandatory joinder or combining of multiple arbitrations is an example of such a limitation of a plaintiff's control of the litigation he or she commences.

While as noted above there is a distinct similarity between the wording and the concept of Rule 30 of the Dispute Resolution Practice Code and Rule 6 of the Rules of Civil Procedure, there is a substantial difference in the legislative underpinnings of the two sets of Rules.

While the Rules of Civil Procedure are regulations made under the Courts of Justice Act, the rules contained in the Dispute Resolution Practice Code are procedural enactments that are neither law nor regulation, and which draw their authority from the rule-making powers in section 21 of the Insurance Act and section 25.1 of the Statutory Powers Procedure Act.

While section 138 of the Courts of Justice Act sets out the basic principle of avoidance of a multiplicity of proceedings, one that is consistent with the content of Rule 6 of the Rules of Civil Procedure, the Insurance Act, which creates the statutory accident benefits arbitration scheme, provides no such thematic guidance.

The SPPA, which governs all arbitrations at the Commission, at section 9.1(4), specifically sets out the powers of tribunals with regard to the combining of proceedings.

Section 9.1(1) states:

If two or more proceedings before a tribunal involve the same or similar questions of fact, law or policy, the tribunal may,

(a) combine the proceedings or any part of them, with the consent of the parties;

(b) hear the proceedings at the same time, with the consent of the parties;

(c) hear the proceedings one immediately after the other; or

(d) stay one or more of the proceedings until after the determination of another one of them.

The provision clearly allows the combining of matters with consent of the parties, or the hearing of proceedings one after another, or the staying of one or more proceedings until after the determination of the other upon the order of the tribunal. What it does not allow is the combining of different matters without the consent of the parties.

Arbitrator Bayefsky, in Dhir and Non-Marine Underwriters, Mbrs. Of Lloyd's (FSCO A98-001394, September 28, 2999), dealt with the powers of arbitrators to order the combining of files. He observed:

I find that my general authority to control the arbitration process cannot replace or modify the SPPA's clear provisions regarding combining proceedings. I, therefore, conclude that despite Section 21 of the Insurance Act, Rule 30 of the Practice Code and my general common law authority, I do not have the jurisdiction to combine Mr. Dhir's arbitrations without his consent.

Arbitrator Bayefsky supported his conclusion on jurisdiction with a thorough analysis of the authority of the Director to make rules such as Rule 30, and the interaction of such rules with the SPPA and other statutory authority. I agree with Arbitrator Bayefsky's analysis.

Arbitrator Bayefsky also examined the interaction of section 23(1) of the SPPA, which deals with the authority of a tribunal to "make such orders...as it considers proper to prevent abuse of its processes" with section 9.1. He concludes that "(W)hile it is conceivable that under certain circumstances this might permit an arbitrator to combine cases without a party's consent (or, at least, to make 'punitive' orders against an applicant), I find that these provisions do not apply to the case at hand."

It is of some note that since the Dhir decision was released in 1999, the Divisional Court has dealt with circumstances involving the provisions of section 23(1) and the common law powers of a tribunal to control its own process. In Royal & Sun Alliance Insurance Co. of Canada v. Volfson,² the court held that notwithstanding specific legislative provisions defining parties and defining the costs power of an arbitrator against such a party, in the presence of abuse of process an arbitrator had the power to make a cost award pursuant to section 23(1) "requiring the abuser to compensate those who had been caused expense as a result of the abuse of process."

While such an analysis does not alter the basic findings of Arbitrator Bayefsky that there is no jurisdiction to order the combining of files without the consent of the parties pursuant to section 9.1, it does reinforce his observation that "under certain circumstances this (a finding of abuse of process) might permit an arbitrator to combine cases without a party's consent."

I also note that a finding of abuse of process could also justify a costs sanction against the offending party or his or her representative personally³, a situation that might well discourage the unreasonable withholding of consent to combine files by a party.

There is no question that, at some point, the bringing of a multiplicity of applications could be found to be vexatious behaviour, or an abuse of process. As Sir George Jessel M.R. observed in Peruvian Guano v. Bockwoldt and others⁴:

It may be vexatious on many grounds. It may be so utterly absurd that the court can see it cannot possibly succeed, but that it is brought only for annoyance; and then there is jurisdiction to stay the action. That is pure vexation. Or it may be vexatious in this way: the plaintiff, not intending to annoy or harass the defendant but thinking that he will get some fanciful advantage, sues him at the same time in two courts within the same jurisdiction- in two of the Queen's courts. That is vexatious, because, whatever the intention of the plaintiff may be, he cannot get any benefit in that way, and the defendant is harassed by two suits.

Henry J. in Re Lang Michener & Fabian⁵ repeated much the same considerations:

vexatious actions include those brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights.

Pardu J. in Sandwith v. Zahn⁶ also noted that "unexplained multiplicity of proceedings is a factor to be considered in assessing whether proceedings are vexatious."

Although in this matter there are three separate arbitration applications arising out of one motor vehicle accident, each involves a different party. Presumably each suffered injuries peculiar to her or himself. I have no evidence that the actions were brought separately, and consent to consolidate withheld for an improper purpose, or the oppression of Certas. Nor am I willing to infer such an improper purpose from the record or the very limited evidence available to date. Consequently, no consolidation order can be made based on abuse of process.

Although I accept that there will likely be a certain efficiency arising if the three arbitrations are combined or heard together, I note the comments of Cullen J. in Mon-Oil Ltd. v. Canada⁷:

Certainly for the defendant, it would be more convenient and administratively easier to consolidate/join the action or require that they be heard consecutively in a pre-determined order. However, that is clearly not the test, and is a long way from meeting the heavy onus. Inconsistent findings of fact may well occur but vigilant counsel and a vigilant court can minimize that possibility, and in any event is not a sufficient ground to warrant consolidation.

While I have found that there is no jurisdiction for an arbitrator to order consolidation of arbitrations without the consent of the parties, in the absence of an abuse of process, I note Cullen J.'s call to vigilance to avoid unnecessary and inconsistent findings of fact. Consequently, I order that the three arbitrations be heard, one after the other, before the same arbitrator, a situation which, in accordance with section 9.1(c) of the SPPA, does not require the consent of the parties.

I also note that section 4 of the SPPA provides for the waiver on consent of any procedural requirement, and urge the parties to agree on the most expeditious manner of hearing these three arbitrations.

EXPENSES:

I leave the issue of expenses to the hearing arbitrator.

January 16, 2006

John Wilson

Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 7

FSCO A04-001871, A05-000146 and A05-000725

BETWEEN:

MARYAN AHMED

ABDULKADIR ABDURAHMAN

ABSHIR ABDULLE-OMAR

Applicants

and

CERTAS DIRECT INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. The above arbitrations shall be heard by the same arbitrator, one immediately after the other.

January 16, 2006

John Wilson

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Royal & Sun Alliance v. Volfson [2005] O.J. 4532
3. 3See section 282(11.2) of the Insurance Act
4. 4Peruvian Guano Co. v. Bockwoldt and others All E.R. Rep. 715, C.A.
5. 5Re LangMichener & Fabian 1987 CanLII 172 (ON HCJ), 59 O.R. (2d) 353
6. 6Sandwith v. Zahn [1996] O.J. No. 4230
7. 7Mon-Oil Ltd. v. Canada (1989) 1989 CanLII 10310 (FC), 27 F.T.R. 50