Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 137

FSCO A05–001356

BETWEEN:

MR. M.

Applicant

and

PEMBRIDGE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Judith Killoran

Heard: April 2, 2007, in Kitchener, Ontario

Transcript received on May 2, 2007

Appearances: Mr. M. represented himself with the assistance of a Serbian interpreter

John P. Pavoni and Sylvia Lee for Pembridge Insurance Company

Issues:

The Applicant, Mr. M., was injured in a motor vehicle accident on February 16, 2002. He applied for statutory accident benefits from Pembridge Insurance Company (“Pembridge”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. M. 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:

Is Mr. M. a party under disability, as defined in Rule 10 of the Dispute Resolution Practice Code?

Result:

Mr. M. is a party under disability as defined in Rule 10 of the Dispute Resolution Practice Code.

BACKGROUND:

On March 12, 2007, Arbitrator Snider conducted a resumption of pre-hearing discussion between Mr. M., who represented himself, and Ms. Sylvia Lee, who represented Pembridge. Arbitrator Snider issued two orders: a production order and a procedural order. The procedural order stated:

Pursuant to Rule 10.3 of the Dispute Resolution Practice Code I find that during the course of the pre-hearing discussions I have conducted to date, the applicant has consistently exhibited signs of mental difficulty. Accordingly I find it necessary to direct a hearing on a preliminary issue to determine whether the applicant has the mental capacity to proceed in the dispute resolution process.

As there is a hearing set to commence on April 2, 2007 in Kitchener, Ontario, I hereby order that the said hearing shall deal with the preliminary issue of whether the applicant has the mental capacity to proceed in the dispute resolution process under Rule 10 of the Dispute Resolution Practice Code. A new Notice of Preliminary Issue Hearing shall accompany this letter.

EVIDENCE AND ANALYSIS:

I conducted a preliminary issue hearing on April 2, 2007 in Kitchener, Ontario. The preliminary issue was whether Mr. M. qualified as a party under disability according to the requirements of Rule 10 of the Dispute Resolution Practice Code (The “Code”). The preliminary issue hearing was ordered by Arbitrator Snider pursuant to Rule 10.3 which states:

Where an adult party has not been declared mentally incapable under the provisions of the SDA [Substitute Decisions Act, 1992], but exhibits signs of mental difficulty during the course of a mediation, settlement discussion, neutral evaluation or proceeding, either party may request a hearing on a preliminary issue, or the Dispute Resolution Group may direct a hearing on a preliminary issue to determine whether:

(a) the party has the mental capacity to proceed in the dispute resolution process;

(b) there is an attorney with a valid continuing power of attorney over the party’s property; or

(c) there is a person such as a spouse, same sex partner, near relative, close friend or a professional such as a doctor, lawyer or business entity, such as a trust company, who has made or intends to make arrangements for the appointment of a guardian over the party’s property under the provisions of the SDA.

Rule 10.4 specifies that parties shall be given written notice of the hearing on a preliminary issue to inquire into a party’s mental capacity to proceed in the dispute resolution process. On March 5, 2007, written notice of the preliminary issue hearing was given to the parties by the Financial Services Commission of Ontario.

Mr. M. represented himself at the preliminary issue hearing with the assistance of a Serbian interpreter. Pembridge filed no evidence and called no witnesses with respect to the issue of Mr. M.’s mental capacity. However, Pembridge reviewed recent case law on the question and presented its submissions at the conclusion of the hearing.

I asked Mr. M. a series of questions relating to Rule 10.3 of the Code. Based on his answers, I determined the following facts:

1. Mr. M. has not been declared mentally incapable under the provisions of the Substitute Decisions Act, 1992 (SDA).

2. There is no attorney with a valid continuing power of attorney over Mr. M.’s property.

3. There is no person, either a relative, close friend or professional, who has made or intends to make arrangements for the appointment of a guardian over the party’s property under the provisions of the SDA.

Mr. M. testified about being under the care of a physician for brain trauma. Although he appeared to be well oriented as to time and place, he testified that the purpose of the hearing was to hear his claim for physiotherapy and massage. When I inquired about whether he received notice about the preliminary issue hearing regarding his mental capacity, he stated: “Don’t understand. I don’t understand. What do you mean?”² When I asked Mr. M. more specific questions, his responses were scattered and unfocused. Although he was capable of telling me his address, including postal code, phone number, date, and the hearing location, he could not identify the benefits he was seeking with any specificity.

Pembridge reviewed 3 FSCO cases: Jagdeo and Royal & Sun Alliance Insurance Company of Canada³, Mr. Y and Allstate Insurance Company of Canada⁴ and Kabala and TD Home and Auto Insurance Company.⁵

Pembridge submitted, from a procedural perspective, that it is clear from FSCO case law that paramount consideration is given to fairness between the parties with a predominant concern, particularly with a self-represented party, that the insured person has the capacity to understand the dispute resolution process. In the 3 cases relied on by Pembridge, one of the parties initiated the process outlined in Rule 10 of the Code. In this case, the Financial Services Commission of Ontario initiated the process. Arbitrator Snider issued an order noting that Mr. M. had exhibited signs of mental difficulty during the dispute resolution process.

Pembridge submitted that the second part of the process under Rule 10 of the Code was the preliminary issue hearing as it was being conducted by me to test the mental capacity of Mr. M. in the absence of other evidence, such as medical evidence. Pembridge argued that I was only required to determine whether Mr. M. has the mental capacity to participate in the dispute resolution process. As mental capacity is not defined in the Code, it is left to the arbitrator to make the determination based on questioning the applicant. Pembridge commented that my questioning revealed that Mr. M. meets the threshold for personal care and seemed to understand “the general thrust of what’s taking place”.⁶ However, Pembridge argued that the appropriate disposition would be to err on the side of caution and refer Mr. M. under Rule 10.6, which is to notify the Public Guardian and Trustee, to request that appropriate steps be taken under the provisions of the SDA.

When Mr. M. was asked whether he understood Pembridge’s submissions, he stated that he understood that Pembridge was in favour of him proceeding and representing himself. He did not understand the content of Pembridge’s submissions. He then offered a rambling account of various issues in his life.

At the conclusion of the hearing, Mr. M. asked me what had just taken place. Although I explained the purpose of the hearing several times, he did not appear to grasp the purpose or the significance of the hearing. He lacked the comprehension to understand Pembridge’s submissions. Also, Mr. M. does not appreciate the elements of his claim or the nature of the dispute resolution process.

I find that Mr. M. does not have the mental capacity to proceed in the dispute resolution process. Consequently, I find that that Mr. M. may be incapable of managing property and that serious adverse effects are occurring or may occur as a result. I also find that there is no attorney or person such as described in Rules 10.2, 10.3 and 10.5 who is suitable, willing and able to proceed in the dispute resolution process and to receive and administer statutory accident benefits on behalf of Mr. M. In this situation, I must look to Rule 10.6 of the Code for a remedy.

Rule 10.6 of the Code states:

Where there is no person such as described in Rules 10.2, 10.3 or 10.5 available to act, the adjudicator may notify the Public Guardian and Trustee to request that appropriate steps be taken pursuant to the provisions of the SDA.

I will forward a copy of this decision to the Public Guardian and Trustee and request that appropriate steps be taken, pursuant to the provisions of the SDA. Subsection 27(2) of the SDA specifies that the Public Guardian and Trustee shall investigate any allegation that a person is incapable of managing property and that serious side effects are occurring, or may occur, as a result. I will follow up with the Office of the Public Guardian and Trustee within 60 days of the issuance of this decision.

July 12, 2007

Judith Killoran Arbitrator

Date