Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 42

FSCO A05-002828

BETWEEN:

SHALLAJA BAHUGUNA

Applicant

and

SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC.

Insurer

MOTION HEARING

Before:

Joyce Miller

Heard:

November 24, 2006, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Ms. Bahuguna did not appear

Tullio D'Angela for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

The Applicant, Shallaja Bahuguna, was injured in a motor vehicle accident on January 25, 2005. She applied for and received statutory accident benefits from Security National Insurance Co./Monnex Insurance Mgmt Inc. ("Security National"), payable under the Schedule.¹ Security National denied her claim for medical benefits and cost of examinations. The parties were unable to resolve their disputes through mediation, and Ms. Bahuguna applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Pursuant to Rule 9.8 of the Dispute Resolution Practice Code,² should the firm of Mazin & Rooz be permitted to withdraw as solicitors of record for the Applicant, Ms. Bahuguna?
Should Ms. Bahuguna's arbitration be dismissed without a hearing on the grounds that it is frivolous, vexatious or has been commenced in bad faith, pursuant to Rules 68.1 and 68.2 of the Dispute Resolution Practice Code?

Pursuant to Rule 9.8 of the Dispute Resolution Practice Code, the firm of Mazin & Rooz is permitted to withdraw as solicitors of record, for the Applicant, Ms. Bahuguna.
The arbitration is dismissed.
Ms. Bahuguna shall pay Security National $1,000, inclusive of GST, for its disbursements and legal fees.

A pre-hearing discussion was held on October 24, 2006. Ms. Bahuguna failed to attend the pre-hearing. Her counsel, Ms. Nureen Shariff, advised that Ms. Bahuguna was aware of the pre-hearing; she was unable to get any instructions from her. Accordingly, Ms. Shariff requested to be removed as solicitor of record pursuant to Rule 9 of the Dispute Resolution Practice Code. In addition, counsel for Security National requested that Ms. Bahuguna's arbitration be dismissed pursuant to Rule 68 of the Dispute Resolution Practice Code.

By letter of October 30, 2006, I wrote to Ms. Bahuguna advising her that her counsel was requesting to be removed as solicitor of record and that Security National was requesting that her Application for Arbitration be dismissed pursuant to Rule 68 of the Dispute Resolution Practice Code.

On October 30, 2006, FSCO sent Ms. Bahuguna a Notice of Motion hearing scheduled for November 24, 2006 advising her that her solicitor was requesting to get off the record and that Security National was requesting that her arbitration be dismissed..

The Motions hearing in this case commenced as scheduled on November 24, 2006. Ms. Bahuguna did not attend the hearing.

After reviewing the affidavit of Ms. Dimple Verma, Barrister and Solicitor at the firm of Mazin & Rooz, and the supporting documents provided, I am satisfied that there has been a breakdown in the solicitor-client relationship. Accordingly, pursuant to Rule 9.8 of the Dispute Resolution Practice Code, I find that the firm of Mazin & Rooz is permitted to withdraw as solicitor of record, without terms.

THE LAW

Rules 68.1 and 68.2 of the Dispute Resolution Practice Code provide:

68.1 Subject to Rule 68.2, an adjudicator may dismiss a proceeding without a hearing where the proceeding is frivolous, vexatious or is commenced in bad faith.

68.2 Before dismissing a proceeding under this Rule, an adjudicator shall deliver written notice to all parties of the intention to dismiss the proceeding on the grounds set out in Rule 68.1.

EVIDENCE AND ANALYSIS

As noted above, Ms. Bahuguna did not attend the scheduled Motions hearing. There is no indication in the file that Ms. Bahuguna made any effort to inform FSCO that she would not appear. In addition, the Commission file reveals that Ms. Bahuguna did not at anytime advise the Commission of any change in her address. The Notice of the Motions hearing sent on October 30, 2006 stated that the purpose of the Motions Hearing was to deal with a request by her solicitor to get off the record and to deal with the Insurer's request to have the arbitration dismissed. In addition the Notice of Motion stated:

You may attend this motion in person and/or be represented. If you or your representative do not attend at the motion, the arbitrator may dispose of the motion in your absence and you will not be entitled to any further notice.³

Accordingly, for these reasons, I find that Ms. Bahuguna had proper notice of the hearing to dismiss her arbitration. Ms. Bahuguna did not appear for this hearing. Accordingly, pursuant to section 7 of the Statutory Powers Procedure Act, I proceeded to dispose of the case in Ms. Bahuguna's absence.

The purpose of the Motion Hearing was to determine whether Ms. Bahuguna's arbitration should be dismissed pursuant to Rule 68 of the Dispute Resolution Practice Code.

The fact that an applicant does not appear at a scheduled hearing does not mean that an arbitrator can dismiss the arbitration solely on the applicant's failure to attend the hearing. While I have authority pursuant to section 7 of the SPPA to proceed with the hearing, the burden of proof rests with Security National to show on a balance of probabilities that Ms. Bahuguna's claim should be dismissed.

For the following reasons, I find that Security National has fulfilled its burden.

Security National presented an affidavit by Ms. Kristi Piekny, a lawyer at the law of Lawson McGrenere LLP, with supporting documentation, to show that since the filing of the Application for Arbitration, which was executed by Ms. Bahuguna's lawyer, there has been a complete failure on the part of Ms. Bahuguna to fulfill any of her obligations in support of her claim.

Security National submits that Ms. Bahuguna's lack of response to the arbitration proceeding, including her failure to attend the scheduled pre-hearing on October 24, 2006, her lack of contact with her counsel to provide any instructions, and not appearing at the Motion hearing, despite being properly served with notice of the hearing, makes it unfair to Security National to have to continue with this proceeding. Accordingly, Security National submits that the appropriate inference for Ms. Bahuguna's total lack of participation in the arbitration process is that her Application for Arbitration is frivolous and vexatious and should be dismissed pursuant to section 68 of the Dispute Resolution Practice Code.

In support of its submissions Security National relies on the case of Al-Hajam and Allstate Insurance Co. of Canada⁴ where Arbitrator Wilson follows the reasoning of Mr. Justice Cameron in the case of Canada (Attorney General) v. Hainsworth.⁵ In Hainsworth, Mr. Justice Cameron states "the categories of vexatious proceedings are never closed and must be determined by an objective standard." He further noted that: "(A)n action that initially had some merit might be rendered vexatious through subsequent conduct."

FINDINGS

I find that Ms. Bahuguna had clear notice from my pre-hearing letter of October 30, 2006 and the Notice of Motion hearing of the same date that the dismissal of her Application for Arbitration was being considered on November 24, 2006. I find that despite ample notice of the hearing to dismiss her arbitration Ms. Bahuguna chose not to appear.

I agree with Security National's submissions that Ms. Bahuguna's conduct in respect of her Application for Arbitration is frivolous and vexatious. I find that Ms. Bahuguna completely failed in her obligations to support her arbitration claim. While there might have been some merit to her Application for Arbitration, I find that the proceeding has been rendered vexatious through Ms. Bahuguna's subsequent conduct.⁶ Accordingly, I find that Ms. Bahuguna's Application for Arbitration is dismissed.

EXPENSES:

Security National had been successful in this Motion. Accordingly, I award Security National its expenses. After reviewing Security National's Bill of Costs, I find that Ms. Bahuguna shall pay Security National the amount of $1,000, inclusive of GST for its legal fees and disbursements.

March 6, 2007

Joyce Miller Arbitrator

Date