Financial Services Commission of Ontario
Neutral Citation: 2008 ONFSCDRS 100 FSCO A08-000046
BETWEEN:
LARISA TIKHANOVA Applicant
and
AVIVA CANADA INC. Insurer
DECISION ON A MOTION
Before: Robert A. Kominar Heard: By telephone conference call on May 30, 2008. Appearances: Harry Steinmetz for Ms. Tikhanova Kevin Griffiths for Aviva Canada Inc.
Issues:
The Applicant, Larisa Tikhanova, was injured in a motor vehicle accident on September 10, 2000. She applied for and received statutory accident benefits from Aviva Canada Inc. (“Aviva”), payable under the Schedule.1 Aviva terminated weekly caregiver benefits. The parties were unable to resolve their disputes through mediation, and Ms. Tikhanova applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
At a motion brought by the Applicant, held on May 30, 2008, Ms. Tikhanova requested leave to withdraw her application for arbitration.
The issues are:
Should Ms. Tikhanova be granted leave to withdraw her application for arbitration, and if so, on what terms?
If Ms. Tikihanova is granted leave to withdraw her application, what is the status of Aviva’s claim for repayment of benefits?
Result:
Ms. Tikhanova is granted leave to withdraw her application for arbitration subject to the parties resolving the issue of expenses to date, or subject to an expense hearing to fix the amount of expenses.
Aviva’s claim for repayment is dismissed without prejudice due to lack of jurisdiction to proceed after the applicant withdraws all her issues from arbitration.
EVIDENCE AND ANALYSIS
Ms. Tikhanova claims to have been involved in a motor vehicle accident on September 10, 2000. She applied for arbitration of Aviva’s decision to terminate her caregiver benefits as of May 30, 2007. At the pre-hearing both Mr. Griffiths and Mr. Krylov, who were Ms. Tikhanova’s legal counsel at the time, agreed to conduct a preliminary issue hearing into the question of whether Ms. Tikhanova was actually involved in a motor vehicle accident on September 10, 2000. I agreed with this procedure as a determination that she was not involved in an accident would clearly affect her claims for ongoing entitlement to caregiving benefits. It also has implications for Aviva’s claim for a repayment of accident benefits, which is the other substantive issue in the arbitration
Ms. Tikhanova at some point retained new legal counsel and Mr. Steinmetz wrote to the Commission requesting that the application for arbitration be withdrawn, as his preference was to try this matter in the Superior Court. Aviva took no position on the issue of withdrawal of Ms. Tikhanova’s claims for caregiving benefits, however it objected to what Mr. Griffiths characterized as the Applicant’s attempts to withdraw the Insurer’s issues as well.
Aviva wishes to proceed with the preliminary issue hearing and obtain a ruling on whether Ms. Tikhanova was involved in an accident or not.
I heard submissions from both counsel and, after carefully considering the matter, I find that it is reasonable and fair to allow Ms. Tikhanova to withdraw her application for arbitration, subject to some resolution or determination of the expense implications of this decision. I also find that there is no right for Aviva to maintain its claim for repayment at the Commission unless there remains an issue in dispute which the Applicant has brought here for adjudication.
The factors which I consider to be most relevant to granting Ms. Tikhanova leave to withdraw her application for arbitration are that the request comes fairly early in the process. The application was received by the Commission on January 14, 2008, a pre-hearing was held on March 26, 2008 and the preliminary issue hearing was originally scheduled for June 9, 10, 2008, and on consent of both parties adjourned until July 14, 15, 2008. In my view, this reflects relatively expeditious movement of this case through the dispute resolution process. My decision may have been different had this request not been made as early in the process as it was. I do not have reason to believe that Aviva has been unduly prejudiced by having engaged insignificant preparation for the arbitration in any way that cannot be compensated fairly through expenses. And I further find that Aviva is not likely to have incurred significant arbitration expenses at this point in the proceeding. Any preparation they have done for the arbitration will no doubt be useful in their defence of a court case for accident benefits. Also, the fact that Aviva did not oppose the withdrawal of Ms. Tikhanova’s claims supports the decision to grant her leave to do so.
The other issue before me is whether Aviva’s claims for repayment of benefits can stand alone, in the absence of any continuing claims being asserted by Ms. Tikhanova at the Commission. Aviva argued that they will be seriously prejudiced by a withdrawal if they cannot proceed to obtain a decision on whether she was involved in the accident or not and then, if they are successful on that aspect of the case, proceed to seek an order for repayment of benefits. In this regard, Mr. Steinmetz has advised that since this dispute started, there have been further denials of benefits by Aviva, which may ultimately have to be adjudicated as well. He intends to pursue those new claims in court. Mr. Griffiths’ submission was that all of these accident benefit claims are rationally related to the question of whether Ms. Tikhanova was involved in the accident or not and that is why it is best to allow the preliminary issue hearing to proceed.
At this point, I note that Aviva’s claim for repayment of benefits is unusual in the sense that they are first raising the allegation that Ms. Tikhanova was not involved in the motor vehicle accident some 8 years after it is said to have occurred, and further they have been paying various accident benefits to her for many years. She has been determined to be catastrophically impaired according to the information provided to me by counsel.
Mr. Steinmetz advised me that there is currently a tort action pending in the Superior Court and that the tort insurer has pleaded that Ms. Tikhanova was not involved in this accident as well. His concern is with the possibility of inconsistent decisions on this significant factual issue. Although arbitrators have identical authority and significant experience in deciding issues such as whether the applicant was in an accident or not, I find that in this particular case it is reasonable and appropriate to have the accident benefits and tort claims dealt with in one forum if possible. The only place under our system where that can currently happen is in the Superior Court of Justice.
Mr. Griffiths submitted that there will be significant potential prejudice and risk to Aviva if they cannot proceed with the preliminary issue at the Commission. Specifically, he stated that there is apparently one “independent” witness to the accident, and by “independent” he means a person who has no vested interest in the outcome of this dispute. The other witnesses are in some way related to or acquainted with drivers of the cars, as far as I have been advised. Mr. Griffiths claims that if Ms. Tikhanova is allowed to withdraw her claims from arbitration and if Aviva is not allowed to promptly proceed with the preliminary issue hearing, there is a possibility that this witness will not be available by the time a trial comes up. He suggested that it could take many years to obtain a trial date in the Toronto region. Mr. Steinmetz suggested that it would not be that long. I have only counsel’s estimations of how long it would take to obtain trial dates. However, in the end, I do not find that to be particularly relevant to my decision.
Although he did not frame his submissions exactly in this way, Mr. Griffiths’ argument is that Aviva’s claim for a repayment is tantamount to a counterclaim in court. The Rules of Practice in the Superior Court allow for the continuation of a counterclaim even if a claim is withdrawn by a plaintiff. Mr. Griffiths proposes that the same approach be adopted by the Commission. I do not accept the analogy.
In this regard, I agree with the decisions of then Arbitrator Seife in Khosa and Pilot Insurance Company (OIC A95-000375, October 23, 1996) which further relies on the decision of Arbitrator Mackintosh in Aladejebi and State Farm Mutual Automobile Insurance Company (OIC A-005933, September 27, 1994). In those decisions, the arbitrators noted that procedure at the Commission has from the beginning been designed to be simpler and more expeditious than in the courts. There is nothing in the Insurance Act, the Schedule or the Dispute Resolution Practice Code which creates a free-standing right for an insurer to arbitrate a dispute at the Commission. In fact, the reality is just the opposite. Only an applicant can initiate arbitration. If an insurer, after a failed mediation, wishes to independently proceed with a dispute, its only option is to bring the matter to court. Thus, in the face of all of the Applicant’s issues being withdrawn from arbitration, the Insurer’s claim for repayment and its request that the Commission rule on whether Ms. Tikhanova was involved in the accident cannot stand. I agree with Mr. Griffiths’ submission that neither the Applicant nor I have the right to “withdraw” the claim for a repayment. However, absent any issues brought to arbitration by the applicant there is no jurisdiction for the insurer to proceed in this forum. Any such proceeding would be would in my view be a nullity. Therefore there is no practical option but to dismiss the insurer’s claim on jurisdictional grounds, without prejudice to their raising the repayment issue in court proceedings or in any new application for arbitration initiated by Ms Tikhanova at the Commission.
The Insurer is not without recourse. Aviva can, and frankly could have already if the issue is truly as significant as Mr. Griffiths argues that it is to the Insurer, start an action in court against Ms. Tikhanova for repayment. There is no need to wait for Ms. Tikhanova to commence an action for accident benefits if Aviva is worried about delay. There may or may not be an equally expeditious process to resolve the question of whether she was involved in an accident before a trial, but that is a reality an insurer must accept under the current dispute resolution system for automobile accidents.
Mr. Griffiths acknowledged that Aviva is adopting what he characterized as an “extreme” position with regards to Ms. Tikhanova and that it is doing so knowingly. In my view, the balance of convenience in these circumstances is to have all of the disputes between Ms. Tikhanova and Aviva dealt with in one place, particularly because inconsistent decisions on whether she was involved in the accident are so central to not only her ongoing claims, but also to whether she should have to repay benefits.
Having said this, I find that although Aviva has been caused to incur expenses in this arbitration and that if Ms. Tikhanova wishes to withdraw her claims and start an action in court, Aviva should be entitled to reasonable expenses associated with being brought into the arbitration process. I encourage the parties to resolve this matter between themselves as my view is that these expenses are not likely very significant at this point in time. If this cannot be accomplished, either party may contact the case administrator to arrange for a time to argue the matter and I shall fix expenses.
EXPENSES:
If the parties cannot agree on expenses I remain seized of the matter and shall assess them.
June 23, 2008
Robert A. Kominar Arbitrator
Date:
Financial Services Commission of Ontario
Neutral Citation: 2008 ONFSCDRS 100 FSCO A08-000046
BETWEEN:
LARISA TIKHANOVA Applicant
and
AVIVA CANADA INC. Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Ms Tikhanova is granted leave to withdraw her application for arbitration subject to the parties resolving the issue of expenses to date, or subject to an expense hearing to fix the amount of expenses.
Aviva’s claim for repayment is dismissed without prejudice for want of jurisdiction to proceed in the absence of any claims being asserted by the applicant for accident benefits at the Financial Services Commission of Ontario.
June 23, 2008
Robert A. Kominar Arbitrator
Date:
Footnotes
- The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.