Neutral Citation: 2008 ONFSCDRS 120 FSCO A08-000151

BETWEEN:

VICTOR ZHUKOVSKIY Applicant

and

YORK FIRE & CASUALTY INSURANCE COMPANY Insurer

DECISION ON A MOTION

Before: Eban Bayefsky Heard: July 4, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Owen Elliott for Mr. Zhukovskiy Stanley Razenberg for York Fire & Casualty Insurance Company

Issues:

The Applicant, Victor Zhukovskiy, was injured in a motor vehicle accident on October 20, 2006. He applied for statutory accident benefits from York Fire & Casualty Insurance Company (“York”), payable under the Schedule.¹ York denied Mr. Zhukovskiy’s claims for certain medical benefits, for the cost of certain assessments and for housekeeping benefits. The parties were unable to resolve their disputes through mediation, and Mr. Zhukovskiy 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 motion are:

Is Mazin Rooz Mazin entitled to be removed from the record as Mr. Zhukovskiy’s representative in this arbitration?
Is Mazin Rooz Mazin required to produce an affidavit detailing the breakdown in its solicitor-client relationship with Mr. Zhukovskiy?
Is York Fire entitled to its expenses of the pre-hearing conference and motion from Mr. Zhukovskiy?

Result:

Mazin Rooz Mazin is removed from the record as Mr. Zhukovskiy’s representative in this arbitration.
Mazin Rooz Mazin is not required to produce an affidavit detailing the breakdown in its solicitor-client relationship with Mr. Zhukovskiy.
Mr. Zhukovskiy shall pay to York Fire & Casualty Insurance Company expenses of the pre-hearing conference in the amount of $100.

EVIDENCE AND ANALYSIS:

(i) Motion to be Removed from the Record

On January 28, 2008, Alexander Mazin filed an Application for Arbitration with the Commission on behalf of Mr. Zhukovskiy. On May 26, 2008, I conducted a pre-hearing conference in this matter. On May 27, 2008, I issued the following pre-hearing letter:

The pre-hearing conference in this matter commenced on May 26, 2008, at 2:00 p.m., at the offices of the Financial Services Commission of Ontario in Toronto. Mr. Elliott and Mr. Razenberg participated. Mr. Elliott indicated that Mr. Zhukovskiy had advised that he would not be attending the pre-hearing conference.

As a result of Mr. Zhukovskiy’s non-attendance, Mr. Elliott advised that he was unable to properly address the various matters normally dealt with at a pre-hearing conference. Mr. Elliott also indicated that his firm would be considering whether to bring a motion to remove itself from the record as Mr. Zhukovskiy’s representative. Mr. Elliott sought an adjournment in order to be able to determine how to proceed in the circumstances. Mr. Razenberg consented to the adjournment, but sought his client’s costs of the day.

I allowed the adjournment. This matter will resume on July 4, 2008, at 10:00 a.m., at the offices of the Financial Services Commission of Ontario in Toronto, at which time I will hear Mr. Elliott’s motion to have his firm removed from the record. Mr. Elliott shall advise as soon as possible if he intends on continuing to represent Mr. Zhukovskiy. If he does, then the July 4, 2008 date will be used as a resumption of the pre-hearing, at which Mr. Zhukovskiy is expected to attend. I will address Mr. Razenberg’s request for costs in the context of either the motion or the pre-hearing resumption.

This letter is being copied to Mr. Zhukovskiy at the address currently in the Commission’s file, as well as at a second address provided by Mr. Elliott and to which Mr. Elliott’s firm also sends correspondence to Mr. Zhukovskiy.

If you have any questions or require more information, please telephone this office at (416) 250–6714, or call toll free at 1–800–517–2332.

The same day, the Commission sent the parties and counsel a Notice of Motion, confirming July 4, 2008 as the date of Mazin Rooz Mazin’s (“MRM’s”) motion to be removed from the record.

On June 24, 2008, Alexander Mazin wrote the Commission, Mr. Razenberg and Mr. Zhukovskiy, as follows:

Please be advised that we are seeking to withdraw as the solicitors of record for the above named client. Mazin Rooz Mazin currently has no meaningful instructions from Mr. Zhukovskiy. Therefore there has been a breakdown in the solicitor-client relationship and as such we are no longer in a position to adequately represent the above mentioned client.

Please accept this as our written request for withdrawal pursuant to Rule 9.7 of the Dispute Resolution Practice Code (4th Edition, Updated October 2003).

[Mr. Mazin then set out the phone number and last known addresses of Mr. Zhukovskiy.]

I heard the motion on July 4, 2008. Mr. Elliott and Mr. Razenberg participated. Mr. Zhukovskiy did not attend.

At the outset of the motion, Mr. Elliott provided an Affidavit, sworn by Judy Mathew of MRM, stating, in part, as follows:

This action arises out of a Motor Vehicle Accident that occurred on or about October 20, 2006.
On or about January 2, 2008, the Claimant applied for Arbitration at the Financial Services Commission of Ontario.
It is my knowledge and belief that a pre-hearing was held on May 26, 2008.
It is my knowledge and belief that the Claimant did not attend at the pre-hearing.
It is my knowledge and belief that, despite repeated attempts to contact the Claimant by telephone and by correspondence after the pre-hearing, Mazin Rooz Mazin currently has no meaningful instructions from the Claimant.
It is my knowledge and belief that there has been a breakdown of the solicitor-client relationship.

York Fire took no position with respect to MRM’s motion to be removed from the record. I am satisfied that Mr. Zhukovskiy was properly notified of the motion and the reasons therefor. I accept that there has been a breakdown in the solicitor-client relationship as between Mr. Zhukovskiy and MRM. MRM is hereby removed from the record as Mr. Zhukovskiy’s representative.

(ii) Order for the Production of an Affidavit

As noted in my May 27, 2008 correspondence, York Fire sought its costs of the May 26th pre-hearing, at which Mr. Zhukovskiy did not attend. At the motion, Mr. Razenberg indicated that York Fire might seek costs against MRM for the lost pre-hearing day. To this end, York Fire sought an order requiring MRM to produce an affidavit detailing the breakdown in its solicitor-client relationship with Mr. Zhukovskiy, and in particular the chronology and timing of the breakdown. Mr. Razenberg submitted that such an affidavit might show that MRM could and should have brought its motion to be removed from the record at the time of the pre-hearing conference and that MRM was, therefore, at least as responsible as Mr. Zhukovskiy for the lost pre-hearing day. Mr. Razenberg also submitted that York Fire was not currently seeking costs against MRM, but that it had “concerns” that MRM may have proceeded with this arbitration without Mr. Zhukovskiy’s authority, within the meaning of section 282(11.2)(a) of the Insurance Act (concerning the liability of representatives for costs). When directed to section 282(11.3) of the Act, which states that section 282(11.2)(a) does not apply to a barrister or solicitor acting in the usual course of the practice of law, Mr. Razenberg also submitted that MRM might be liable for costs pursuant to sections 282(11.2)(b) and (c) (concerning the pursuit of frivolous claims and causing expenses to be incurred through unreasonable delay or default). Mr. Razenberg submitted that since York Fire was not currently seeking costs against MRM, it did not wish to directly address the issue of whether there was evidence to support such a claim, although Mr. Razenberg alluded to the first mediation having to be withdrawn due to the unknown whereabouts of Mr. Zhukovskiy. Mr. Razenberg submitted that York Fire required an affidavit from MRM in order to determine whether or not to seek costs against it for the lost pre-hearing day.

Mr. Elliott submitted that York Fire had not provided any basis for a costs order against MRM, that such an order was an extraordinary remedy and that MRM ought not to be ordered to produce an affidavit containing privileged information on the mere possibility that York Fire would subsequently pursue an order for costs against MRM.

I am not prepared to order MRM to produce the requested affidavit. York Fire has currently not provided any evidence to the effect that MRM proceeded improperly in this matter. York Fire is not currently seeking a costs order against MRM in relation to the lost pre-hearing day. York Fire may ultimately decide not to seek costs against MRM following its review of the affidavit. In the absence of a more substantial basis for doing so, I am not prepared to order MRM to produce an affidavit detailing the breakdown of its relationship with Mr. Zhukovskiy. In my view, this would be an unusual and intrusive order, it could very well involve the disclosure of privileged information and it may not result in a costs order being sought in any event.

(iii) Expenses of the Pre-Hearing and Motion

In the event that I was not prepared to order MRM to produce the requested affidavit, York Fire sought expenses of the lost pre-hearing day from Mr. Zhukovskiy in the amount of $500. York Fire sought an additional $500 in respect of the motion. To the extent that he could address this matter, Mr. Elliott did not oppose York Fire’s request for expenses in connection with the pre-hearing, but suggested that expenses for the motion ought to be deferred.

Due to Mr. Zhukovskiy’s non-attendance at the pre-hearing and MRM’s inability to address any of the usual issues at that time, I am prepared to award expenses to York Fire for that day. However, York Fire was represented by a paralegal, and I am, therefore, only prepared to award expenses in the amount of $100. Given that York Fire did not oppose MRM’s motion to be removed from the record, and given their lack of success on the affidavit issue, I decline to award York Fire its expenses of the motion.

The pre-hearing conference in this matter shall resume on September 12, 2008, at 2:00 p.m., at the offices of the Financial Services Commission of Ontario, in Toronto.

July 16, 2008

Eban Bayefsky Arbitrator

Date

Financial Services Commission of Ontario