Financial Services Commission of Ontario Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 136 FSCO A05–002768
BETWEEN:
MIGUEL SOSA Applicant
and
CO‑OPERATORS GENERAL INSURANCE COMPANY Insurer
DECISION ON A MOTION
Before: Robert Bujold Heard: June 15, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances: No one appearing for Mr. Sosa Philippa Samworth for Co-operators General Insurance Company
Issues:
The Applicant, Miguel Sosa, was injured in a motor vehicle accident on February 14, 2002.
He applied for and received statutory accident benefits from Co-operators General Insurance Company (“Co‑operators”), payable under the Schedule1. Disputes arose regarding Mr. Sosa’s entitlement to certain accident benefits. The parties were unable to resolve their disputes through mediation, and Mr. Sosa applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Co-operator’s brought a motion for an Order dismissing Mr. Sosa’s application on the grounds that Mr. Sosa failed to attend a pre-hearing discussion on February 16, 2007 and a pre-hearing/motion hearing on June 15, 2007, and/or on the grounds that the Arbitration itself is frivolous, vexatious or was commenced in bad faith. Co-operators relies upon Rules 33, 34, 37 and 68 of the Dispute Resolution Practice Code (Fourth Edition, Updated October 2003), (the “Code”) and section 7 of the Statutory Powers Procedure Act, R.S.O 1990 C.S22 (the “SPPA”).
For the following reasons, I am prepared to dismiss the arbitration proceeding as vexatious pursuant to Rule 68.1 of the Code.
BACKGROUND:
Mr. Sosa commenced this arbitration proceeding by Application for Arbitration dated June 20, 2006. This is the third arbitration proceeding commenced by Mr. Sosa.
The first Application for Arbitration (A04-000609) was received March 12, 2004 and sought payment in the amount of $3,365.00 in respect of proposed treatment. That matter settled pursuant to Minutes of Settlement dated December 1, 2004 wherein Co-operator’s agreed to fund treatment to a maximum of $3,365.00.
The second Application for Arbitration (also FSCO file no. A05-002768) was received December 2, 2005 and Section 2 of the Application simply stated “Oct 15-2005 needed more physio.” In its Response, Co-operators raised a jurisdictional objection that Mr. Sosa had simply attached the Report of Mediator that had been the subject of the previous application and settlement. No subsequent mediation had been conducted in respect of any denied treatment plans. At the pre-hearing on February 14, 2006, Arbitrator Bayefsky permitted Mr. Sosa to withdraw his application “given that Mr. Sosa prematurely, and potentially inadvertently, proceeded to arbitration.” Co-operators consented to the withdrawal and both parties agreed to the condition that should Mr. Sosa re-apply, the parties’ filing fees would be applied to the new arbitration. For administrative reasons, the withdrawal was permitted on the condition that should Mr. Sosa file a further application, the Commission’s file (A05-002768) would be re-opened with no further fees being required by either party.
This third Application for Arbitration was received on June 21, 2006. As per Arbitrator Bayefsky’s direction, the Commission’s file (A05-002768) was re-opened. In Section 2 of the Application, Mr. Sosa claims “$35,000.00 needed for taxi, physio & assessments as soon as possible – Bloor West Therapy and Sports Centre.” There is no reference to specific treatment plans in dispute and the Report of Mediator attached to the Application for Arbitration is again the Report of Mediator that had been the subject of the first application and settlement. In its Response, Co-operators noted that a mediation had been conducted on June 5, 2006 with respect to two treatment plans prepared by Bloor West Therapy and Sports Medicine Centre. One of the disputed treatment plans for approximately $3,799.00 had been approved in part and the balance was in dispute. The other treatment plan for $4,969.00 had been denied in its entirety.
In all three applications, Mr. Sosa has been represented by his wife, Mrs. Aida Sosa.
I conducted a pre-hearing discussion in the third and current proceeding on September 27, 2006. Mr. Sosa and his representative, Mrs. Sosa, seemed to have some difficulty grasping the principle that in respect of his medical claims, only incurred or proposed treatment denied by the insurer could proceed to arbitration. As well, Mr. and Mrs. Sosa seemed to have some difficulty understanding or accepting the purposes of a pre-hearing discussion, notwithstanding my efforts to explain the process. Mr. and Mrs. Sosa did not seem prepared to clarify or narrow the issues in dispute or otherwise deal with the procedural matters contemplated by Rule 33 of the Code. Instead, the parties engaged in brief settlement discussions. When these failed, Mr. Sosa raised the possibility of withdrawing the arbitration and proceeding instead by Court action. In that regard, Mr. Sosa was advised that any request to withdraw should be made in writing and would require approval of the Commission. Co-operators’ counsel, Miss Samworth, indicated that should Mr. Sosa seek to withdraw this arbitration, she would seek Co-operators’ instructions on whether it would be prepared to consent to the withdrawal and on what terms, if any.
The parties agreed to resume the pre-hearing on February16, 2007. Mr. and Mrs. Sosa advised that they would be travelling to Argentina in the late fall. The reason given was that Mr. Sosa’s father was ill and the length of the trip was unknown, although they seemed quite confident that they would be back in time for the resumption.
I suggested to Mr. Sosa that he may wish to retain legal counsel or a SABS representative for the resumption of the pre-hearing discussion. I also advised Mr. Sosa that whether he retained counsel or a SABS representative or not, I expected both parties to be ready to discuss all of the matters set out in s. 33 of the Schedule including, but not limited to, the issues to be decided in the arbitration hearing, the expert and lay witnesses the parties intend to call, any disputes regarding the identification and exchange of documents and set hearing dates.
A Notice of Resumption of Pre-hearing Discussion for February 16, 2007 was sent to the parties on October 2, 2006.
The pre-hearing discussion was resumed on February 16, 2007. Neither Mr. Sosa nor his representative, Mrs. Sosa, appeared. At approximately 1:20 p.m., the case administrator attempted to contact Mr. Sosa and Mrs. Sosa at the telephone numbers in the Commission file. On calling the number for Mrs. Sosa, the case administrator received a recorded message that the number was not in service. The number for Mr. Sosa reached a recording that the cellular customer was not available.
The telephone recordings suggested that Mr. and Mrs. Sosa’s contact information was no longer current, although the Commission had not received any change of address or telephone number from the Sosas. There was the possibility that the Sosas had not returned from Argentina and a longer than expected trip could help explain the recordings. I found that the recordings did not, in the circumstances, necessarily evidence that Mr. Sosa had lost interest in proceeding with his claim. Further, Miss Samworth advised that Mr. Sosa had consistently evidenced his intention to proceed with his claims in the prior proceedings.
In the circumstances, the Co-operators proposed that a further date for the resumption of the pre-hearing be set for Friday, June 15, 2007 at 10:00 a.m. This would provide Mr. Sosa four months to either return from Argentina (if he was still there) or communicate with the Commission. Co-operators also advised of their intention to bring this motion to dismiss the arbitration to be heard at the same time as the rescheduled pre-hearing. However, Co-operators understood and agreed that should Mr. Sosa attend the rescheduled pre-hearing on June 15, 2007, the motion to dismiss would be withdrawn and the pre-hearing would proceed.
By letter dated February 21, 2007, I wrote to Mr. and Mrs. Sosa confirming that the pre-hearing would be rescheduled to June 15, 2007 at 10:00 a.m., and advising of Co-operators’ intention to bring a motion to dismiss on the same date and time. Pursuant to Rule 68.2 of the Code, I also provided notice to Mr. Sosa of my intention to dismiss the proceeding on the grounds set out in Rule 68.1 in the event that he failed to attend the rescheduled pre-hearing/motion.
Neither Mr. Sosa nor his representative, Aida Sosa, appeared at the rescheduled pre-hearing/motion on June 15, 2007. At approximately 10:15 a.m., the case administrator attempted to contact Mr. Sosa and Mrs. Sosa at the telephone numbers in the Commission file. As on the attempt to contact Mrs. Sosa on February 16, 2007, the case administrator received a recorded message that the number was not in service. When the case administrator called the number on file for Mr. Sosa she reached a recording to the effect “This is Peter. I’m not available. If this is the financial company that keeps phoning here for Miguel, f‑‑‑ off because he doesn’t live here anymore and he’s not paying any money anyway.”
At 10:30 a.m., neither Mr. nor Mrs. Sosa had attended at the Commission and I heard Co-operators’ motion to dismiss the application.
EVIDENCE AND ANALYSIS:
Co-operators filed an affidavit by Carlie Smith, a lawyer at the firm of Dutton Brock LLP in support of the motion. The affidavit attests that Dutton Brock LLP had hired an investigator to contact and/or locate Mr. and Mrs. Sosa. The investigation, which included driver’s license number searches, found a further address for Mr. Sosa (576 Concord Avenue, Toronto, Ontario M6H 2R1) and a further address for Mrs. Sosa (1506-2155 Burnhamthorpe Road West, Mississauga, Ontario L5L 5P4), in addition to the address on file with the Commission (461 Delaware Avenue, Toronto, Ontario M6H 2V1). The investigator has attended at all three addresses but, to date, has not been able to confirm at which, if any, of the addresses the Sosas are residing.
By letter dated February 27, 2007, Co-operators attempted to contact Mrs. Sosa, as Mr. Sosa’s representative, at the Burnhamthorpe address. Co-operators did not receive any response to their correspondence nor was the letter returned.
Co-operators’ motion materials were served on Mr. and Mrs. Sosa by sending a copy by courier and regular mail to all three addresses identified by the investigator. No materials delivered to any of theses addresses have been returned.
I note that none of the several Notices and letters sent to Mr. and Mrs. Sosa by the Commission at the address on file have been returned. The Sosas have not contacted the Commission to advise of any change of address or to update contact information. Indeed, the Commission has had no written or oral communication from Mr. or Mrs. Sosa since the pre-hearing on September 27, 2006. Co-operators filed evidence that neither the adjuster nor Co-operators’ counsel, Miss Samworth, have had any contact from Mr. or Mrs. Sosa since September 27, 2006.
I am satisfied that Mr. Sosa received proper notice throughout this proceeding including notice of the pre-hearing resumption on February 16, 2007, the rescheduled pre-hearing on June 15, 2007 and Co-operators’ motion also returnable on June 15, 2007.
In Al-Hajam and Allstate2, Arbitrator Wilson reviewed the case law on the meaning of “vexatious.” Referring to several sources, he found the term “vexatious” has been variously described as including situations where the court has no power to grant the relief sought or where no reasonable person could possibly expect to obtain the relief. Referring to the case of Canada (Attorney General) v. Hainsworth3, it is noted that Cameron J. remarked “the categories of vexatious proceedings are never closed and must be determined by an objective standard” and “(a)n action that initially had some merit might be rendered vexatious through subsequent conduct.”
Here, the application for $35,000.00 is largely for future physiotherapy treatment, transportation and assessment costs. Only through Co-operators’ Response was it revealed that only two treatment plans were in dispute, one for approximately $3,799.00 of which only a portion remained in dispute, and the other treatment plan for $4,969.00. However, Mr. and Mrs. Sosa did not come to the pre-hearing discussion on September 27, 2006 to discuss these two treatment plans. They came intent to secure a settlement, but when it became clear that Co-operators were not prepared to entertain settlement on their terms, the Sosas lost interest in the proceeding and “threatened” to withdraw the application and take the matter up in Court. I find that the application for $35,000.00 was not a legitimate claim for which an Arbitrator could grant relief but merely a bargaining position being advanced for the purpose of settlement discussions.
However, even if Mr. Sosa’s current application may be viewed as having had some merit initially, I find that his subsequent behaviour has rendered the application vexatious. In that regard, I note that several recent Commission cases have found that conduct constituting an abandonment of a proceeding by failing to appear at pre-hearing discussions and motions, though properly served with notice, may provide sufficient grounds upon to which to dismiss a proceeding as vexatious pursuant to Rule 68.14.
In this case, Mr. Sosa failed to attend before the Commission on two consecutive occasions for which he received proper notice. None of the notices or letters sent to Mr. or Mrs. Sosa by the Commission or Co-operators have been returned as undeliverable, and the Sosas have not communicated with the Commission or Co-operators to advise of any change of address.
Therefore, and in addition to the serious concerns regarding the merits of the application, I find that Mr. Sosa has effectively abandoned his application and that his conduct provides a further basis upon which to find that the application has been rendered vexatious.
The application for arbitration is therefore dismissed pursuant to Rule 68.1 of the Code.
EXPENSES:
Co-operators sought its expenses of both the arbitration and the motion to dismiss. Miss Samworth requested that expenses be fixed in the amount of $1,500.00. In support, she referred to the fact that Co-operators attended at the Commission on three occasions and incurred the expense of preparing motion materials.
As Co-operators succeeded on the motion and the arbitration, it is entitled to its reasonable expenses. Although I was not provided with a Bill of Costs, I am prepared to award $1,000.00 inclusive of G.S.T. and disbursements for Miss Samworth’s three attendances at the Commission and the preparation of motion materials.
Mr. Sosa is therefore ordered to pay to Co-operators its expenses in the amount of $1,000.00.
July 10, 2007
Robert Bujold Arbitrator
Date
Financial Services Commission of Ontario Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 136 FSCO A05–002768
BETWEEN:
MIGUEL SOSA Applicant
and
CO‑OPERATORS GENERAL 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:
The application for arbitration is dismissed pursuant to Rule 68.1 of the Dispute Resolution Practice Code (Fourth Edition, Updated October 2003).
Mr. Sosa shall pay to Co-operators its expenses in the amount of $1,000.00.
July 10, 2007
Robert Bujold Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- FSCO A03-001380, April 21, 2005. The Al-Hajam case and its review of the meaning of vexatious is referred to approvingly by Arbitrator Miller in Oduro-Kye and Security National (FSCO A05-002805, March 6, 2007).
- [2004] O.J. No. 2730
- See Oduro-Kye and Security National (ibid.); Tharmaratnam and CAA (FSCO A05-000094, March 1, 2007); Choudhry and Lombard (FSCO A06-000917, March 5, 2007).