Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 3
FSCO A05-000406
BETWEEN:
ROUSLAN MOUMAEV
Applicant
and
SECURITY NATIONAL INSURANCE COMPANY/MONNEX INSURANCE MANAGEMENT INC.
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
Rosemary Muzzi
Heard:
August 11, 2006, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on July 28, etc., 2006.
Appearances:
David Levy for Mr. Moumaev Madeline Ferreira for Security National Insurance Company/ Monnex Insurance Management Inc.
Facts:
The Applicant, Rouslan Moumaev, claims to have been injured in a motor vehicle accident on July 2, 2003. On July 7, 2003, he applied for statutory accident benefits from Security National Insurance Company/Monnex Insurance Management Inc. ("Security"), payable under the Schedule1, including medical and rehabilitation benefits, payments for housekeeping expenses and costs of examinations. Security did not pay Mr. Moumaev benefits, denying them on the basis that the accident did not occur as reported by Mr. Moumaev and also on the basis that he failed to provide information pursuant to section 33 of the Schedule.
The parties mediated their disputes at the Financial Services Commission of Ontario on November 12, 2003 and dealt with three main issues:
medical benefits in the amount of $12,845 for treatment expenses incurred between July 4, 2003 and December 31, 2003;
payments for housekeeping expenses; and
the cost of a psychological assessment conducted by Assessment Direct in the amount of $2,113.75.2
The parties were unable to resolve their disputes and Mr. Moumaev applied for arbitration under the Insurance Act3 on March 1, 2005. In the Application for Arbitration, Mr. Moumaev sought payment only of $2,113.75 for the cost of the psychological examination.
On April 21, 2004, Mr. Moumaev filed an action in Small Claims Court for medical benefits for the treatment expenses of $12,845. At the Small Claims Court pre-trial, the issues identified were:4
Did the plaintiff wilfully misrepresent material facts with respect to an application for benefits?
Did the plaintiff fulfill his requirements with respect to submitting the necessary forms?
Were the treatment plans reasonable and necessary in the circumstances?
The Small Claims Court trial proceeded on November 7, 2005. Mr. Moumaev did not appear for the trial but he was represented by counsel. The judge delivered oral reasons for decision. Those reasons5 indicate that the judge heard evidence from the driver of the vehicle and from a friend of the driver. While Mr. Moumaev did not appear, the judge read Mr. Moumaev's statutory declaration. The judge indicated in his reasons that "before anything can be claimed it must be established that there was in fact a motor vehicle accident." On this issue, the judge concluded that "there was no accident and that as a result, there was no right to claim for the statutory benefits." The Small Claims Court decision was not appealed.
A pre-hearing discussion with respect to the issues before the Commission was held on October 13, 2005. An arbitration hearing date was set for June 26, 2006. The hearing did not proceed in June as Mr. Moumaev did not appear and Security wished to move for an order dismissing the application. The matter was adjourned to August 11, 2006 both to allow Mr. Moumaev an opportunity to attend and to provide counsel with time to file and respond to the motion materials.
Issues:
The preliminary and other issues for my decision are:
Should Mr. Moumaev’s Application for Arbitration be dismissed on the basis of the doctrines of res judicata and issue estoppel?
Is Mr. Moumaev or his representative liable to Security for its expenses of this proceeding?
Result:
Mr. Moumaev's Application for Arbitration is dismissed on the basis of the doctrine of issue estoppel.
Mr. Moumaev shall pay Security’s expenses in the amount of $500.
Security's Argument:
Security argues that Mr. Moumaev's claims before the Commission cannot proceed as a judge has already rendered a final decision that the accident from which Mr. Moumaev’s claims derive did not occur. The finding that there was no accident on July 3, 2003 eliminates the grounds for the arbitration proceeding before the Commission and, as a result, Mr. Moumaev cannot claim benefits.
Further, Security asserts that the Commission's purpose of resolving disputes is compromised when matters can be re-litigated. Section 281 of the Insurance Act must be interpreted to discourage multiplicity of proceedings and to prevent applicants from pursuing their claims through both the avenues of the Commission and the courts.
Applicant's Argument:
Mr. Moumaev's counsel asserts that the proceeding before the Small Claims Court and the one before the Commission are in fact different, the former dealing with benefits under section 14 of the Schedule and the latter with those under section 24. Therefore, the doctrine of res judicata is not applicable. Counsel did concede that the doctrine of issue estoppel was likely applicable as that doctrine is intended to preclude re-litigation of issues that have been determined in prior proceedings6, and determining whether an accident had occurred on July 2, 2003 was fundamental to the decision arrived at in Small Claims Court and would be fundamental to Mr. Moumaev's pursuit of his claims at the Commission as well. Counsel also asserts, however, that the rule should not be applied in this case to ensure that justice was done in these particular circumstances.7
In order to ensure that justice is done for Mr. Moumaev, counsel asked me to consider the following factors:
Mr. Moumaev did not have an opportunity to present his case at the Small Claims Court because he was not present to deliver his testimony and be cross-examined on that testimony. In his absence, it was impossible to determine the relevant facts.
Mr. Moumaev had a legitimate reason for failing to appear at the Small Claims Court trial. He had outstanding immigration issues that led to a fear of presenting himself in court.
Counsel contended that, in these circumstances, Mr. Moumaev's arbitration proceeding at the Commission incorporates an access to justice issue and therefore he should be given the opportunity to finally be heard.
ANALYSIS:
I find that the doctrine of issue estoppel is applicable in these circumstances. In deciding whether Mr. Moumaev was entitled to the statutory accident benefits he claimed, the Small Claims Court judge ruled on whether an accident had occurred when and as claimed by Mr. Moumaev. At the arbitration hearing, the very same issue would have been put before the Commission in order to determine whether Mr. Moumaev was entitled to the cost of the psychological assessment. In this case, an issue central to Mr. Moumaev's ability to advance his statutory accident benefits claims at the Commission has been finally decided. The fact that this issue has already been decided and the very conclusion itself, that an accident had not occurred, precludes Mr. Moumaev from pursuing his claims at the Commission.
Generally, the ultimate purpose of the dispute resolution process at the Commission is the resolution of disputes between the parties. The process is intended to do so in a way that is expeditious, and consistent with ensuring fairness for the participants. These purposes are compromised if parties are able to re-litigate questions that have already been decided.8
While I may have the discretion to refuse to apply the doctrine, I am not persuaded that there is an access to justice issue that requires that Mr. Moumaev be permitted to arbitrate his claim at the Commission, notwithstanding the decision of the Small Claims Court. Mr. Moumaev was given every opportunity to present his case fully before the Small Claims Court. If some legitimate emergency had occurred which prevented his appearance there, Mr. Moumaev, represented by counsel, could have put that matter before the judge. If his inability to attend at the Small Claims Court had somehow compromised his right to present his case, Mr. Moumaev could have appealed or otherwise sought to review the decision of the judge on that basis. There is no indication that he or his counsel made efforts either to inform the court or otherwise bring forward the issue of Mr. Moumaev's inability to attend his trial.
Moreover, I am not satisfied that Mr. Moumaev’s claims to access to justice are bona fide. I am not satisfied on the evidence that Mr. Moumaev even intends to pursue his claims in any meaningful way and, in these circumstances, find that Mr. Moumaev has forfeited any right to make claims for access to justice. Mr. Moumaev has failed to make any appearance at the Commission since his matter has come on for arbitration and he has provided no explanation for his absence here. Though his counsel attended, counsel appeared to have no idea why Mr. Moumaev was absent. Mr. Moumaev did not appear at the first date set for the hearing of this matter, nor did show for this hearing date despite the fact that it appears that he was available to attend from April 28, 2006.9
EXPENSES:
In awarding expenses, an arbitrator is to consider only the criteria enumerated in section 12(2) of O. Reg. 664, which are:
Each party's degree of success in the outcome of the proceeding
Any written offers to settle made in accordance with subsection (3)
Whether novel issues are raised in the proceeding
The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders
Whether any aspect of the proceeding was improper, vexatious or unnecessary
Security moves for its expenses of the arbitration proceeding10, to be paid either by Mr. Moumaev or his counsel, arguing that the entire arbitration proceeding and its expenses could have been avoided if Mr. Moumaev or counsel had:
warned Security that neither the applicant nor the service provider whose account was at issue would be present for the original arbitration hearing date of June 26, 2006;
responded reasonably to the res judicata issue in light of the decision of the Small Claims Court of which counsel was aware as of May 26, 2006;
disclosed more information to Security, in particular, in relation to Mr. Moumaev's intentions with respect to pursuing his claims.
Counsel for Mr. Moumaev argues that even if Security is successful on the motion, Mr. Moumaev ought not to be liable for Security's expenses given that his immigration problems and the resulting fear that prevented him from having his day in court are novel defences to the issue estoppel question and that in general his claims are not frivolous or vexatious. Further, he argues that counsel should not bear the expenses either because counsel only ever acted on his client’s instructions and was not responsible for any delay in the proceedings.
Taking each of the criteria in turn, I find as follows.
It is clear that Security has been successful on the issue of Mr. Moumaev's inability to pursue his claims at the Commission. There is no evidence before me about any relevant written offers to settle. While the facts of Mr. Moumaev's immigration problems and his fear are somewhat out of the ordinary, issues of res judicata and issue estoppel are not new or novel in this context and the Commission has considered the issue on numerous occasions. I am not persuaded that any party or party’s representative engaged in conduct that tended to prolong, obstruct or hinder the proceeding to the detriment of the other. To the surprise of his counsel, Mr. Moumaev failed to appear at the first arbitration date. On the other hand, Security’s motion materials were delivered to Mr. Moumaev's counsel on June 23, 2006, just three days before the scheduled arbitration. In these circumstances, an adjournment of the proceeding was necessary. Finally, there is insufficient evidence upon which I might conclude that any aspect of the proceeding was improper, vexatious or unnecessary as is contemplated by this final criterion.
Given Security's success on this motion, I order Mr. Moumaev to pay Security's expenses fixed at $500.
January 3, 2007
Rosemary Muzzi Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 3
FSCO A05-000406
BETWEEN:
ROUSLAN MOUMAEV
Applicant
and
SECURITY NATIONAL INSURANCE COMPANY/MONNEX INSURANCE MANAGEMENT INC.
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mr. Moumaev's Application for Arbitration be dismissed on the basis of the doctrine of issue estoppel.
Mr. Moumaev pay Security's expenses in the amount of $500.
January 3, 2007
Rosemary Muzzi Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Motion Record of Security, Tab C, Report of Mediator
- R.S.O. 1990, c.1.2, as amended
- Motion Record of Security, Tab E
- Motion Record of Security, Tab H
- Rasanen v. Rosemount Instruments Ltd. (1994) 1994 CanLII 608 (ON CA), 17 O. R. (3d) 267 (C.A.)
- Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460. Here the Court said that the underlying purpose is to balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case. Although the preconditions to issue estoppel may be met, the court has discretion to refuse to apply it according to a list of factors.
- Lukachko v. Allianz Insurance Company of Canada, FSCO A00-000543, August 31, 2001
- The record before me shows that he was released from immigration detention on April 28, 2006.
- Total fees and disbursements being $3,886.09 and contained in a Bill of Costs delivered to the Commission via fax on July 14, 2006.```