Jess Tendenilla v. Allstate Insurance Company of Canada, 2008 ONFSCDRS 137

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 137

FSCO A06-001684

BETWEEN:

JESS TENDENILLA

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A MOTION

Before: David Muir

Heard: July 8, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Arvin Gupta for Mr. Tendenilla

Richard Horst for Allstate Insurance Company of Canada

Issues:

The Applicant, Jess Tendenilla, was injured in a motor vehicle accident on June 27, 2005. He applied for statutory accident benefits from Allstate Insurance Company of Canada (“Allstate”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Tendenilla 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:

Should I recuse myself because of a reasonable apprehension of bias?

Result:

The motion is dismissed.

EVIDENCE AND ANALYSIS:

A Notice of Motion with supporting affidavit material was filed with the Commission. The Director of Arbitrations Ordered that this material be sealed and not seen by the writer. Neither party asked that I unseal the material. Other than an affidavit and transcript of a telephone message which I did not admit for reasons set out below, the Motion proceeded on the basis of oral submissions and the letters set out below which are in the Commission file.

In support of the Motion Mr. Tendenilla sought to rely upon the transcript of a telephone message left by counsel for Allstate with Mr. Tendenilla’s representative. The transcript was an exhibit attached to the affidavit of the transcriber, an employee of the Mazin Rooz Mazin law firm. The thrust of the message was an invitation to Mr. Tendenilla to engage in settlement discussions. Certain portions of the transcript wherein specific numbers were presumably mentioned were blacked out. More significantly for this Motion the message also contained some remarks by counsel for Allstate interpreting my June 23, 2008 letter as indicating a desire on my part to award expenses against Mr. Tendenilla.

I invited submissions from Mr. Tendenilla respecting the admissibility of the transcript, given that it was in pith and substance a proposal to settle the case. I afforded Mr. Tendenilla’s representative time to think about the issue, consult with his principal or do further research on this point. In the end no submission was forthcoming, other than that the remarks of counsel for Allstate were relevant to the question at hand. I declined to admit the transcript. I found that it was part of a settlement discussion and was therefore privileged. The exceptions to the privilege are limited, and none of them would seem to apply here.²

Mr. Tendenilla submits that my letter of June 23, 2008 discloses a reasonable apprehension of bias because there is no evidentiary foundation for my conclusion therein, that there was an agreement between the parties as described in the letter. It was submitted that nowhere in that letter or the February 12, 2008 letter is it recorded that there was an agreement, unlike where I note in the latter letter that the parties had agreed that an identified preliminary issue be dealt with before proceeding to the merits of the case.

Given the absence of evidence for the agreement it was submitted that it must be inferred that I made that finding based on some extraneous basis, such as my recollection of what had occurred in the February 12, 2008 telephone conference or perhaps on some other and perhaps improper basis.

The classic statement of what will amount to a reasonable apprehension of bias was articulated by the Federal Court of Appeal and adopted by the Supreme Court of Canada in Committee for Justice and Liberty v. Canada (National Energy Board), (1978) 1.S.C.R. 369:

[W]hat would an informed person viewing the matter realistically and practically – and having thought the matter through – conclude? Would he think that it is more likely than not that [the decision maker], whether consciously or unconsciously, would not decide fairly?”

The argument flows from the following passages in two letters written during the course of this proceeding. The material portions of the February 12, 2008 letter were as follows:

This will confirm our discussions of even date.

The hearing of the merits of arbitration FSCO A06-1684 is adjourned to July 7, 8, 9 and 10, 2008 at the offices of the Financial Services Commission in Toronto. These dates are contingent on another matter to which Mr. Horst [is committed] not going ahead on those dates. In the event that the prior scheduled matter proceeds, this arbitration will be adjourned on consent.

A formal Notice of Hearing will be sent to you shortly.

A soon to be filed arbitration in respect of a second accident will be joined with this arbitration and heard together with it. A Rule 30 Order will be made upon receipt of the new application and response. Unless the parties advise otherwise the matters will be combined pursuant to Rule 30 (c).

If a pre-hearing on production issues is required in respect of the second arbitration the parties should request same. In the meantime the parties should exchange production requests as required by the filing process. As well witness lists respecting these new issues must be exchanged at the latest 30 days prior to the hearing.

Pursuant to Rule 31, on consent of the parties I have severed a preliminary issue to be heard on Wednesday February 13, 2008 at 10:00 a.m. at the Offices of the Financial Services Commission in Toronto. No further Notice of this proceeding will be given.

The letter goes on to discuss other issues related to the conduct of the hearing such as the need for an interpreter and other matters.

The content of the letter was not subject to comment by either party at any time prior to late May 2008.

Despite the content of the February 12, 2008 letter Mr. Tendenilla did not bring a second application for arbitration and Allstate requested a telephone conference call to discuss the matter. A conference call was convened with Mr. Alon Rooz participating with Mr. Gupta on behalf of Mr. Tendenilla. It is not clear what role Mr. Rooz had played in the matter as counsel on the record at the time of the February dates was Ms. Amanda Heerschop. In any event, neither Ms Heerschop or Mr. Rooz were in attendance on the February dates.

After an inconclusive discussion of the issue I invited submissions from the parties on what, if any, consequence might flow from the turn of events.

Mr. Tendenilla in his submissions denied that there was any kind of procedural agreement made on February 12, 2008 respecting a second accident and asked for expenses for having to respond to the issue. Allstate did not ask for enforcement of the alleged agreement, but submitted that there ought to be expense consequences for what in its submission was Mr. Tendenilla’s change of mind respecting the procedural agreement.

The material portions of my June 23, 2008 letter are set out here:

The parties disagree about many things, including apparent profound disagreements about what occurred at the outset of this hearing, but they do appear to agree that the only relief to be granted in response to their various concerns is an award of expenses.

State Farm does not make submissions as to what those expenses might be, appearing content to leave the issue to the end of the hearing. Mr. Tendenilla submitted that he ought to be entitled to expenses of $300 for having to respond to the instant issue.

Mr. Tendenilla is not entitled to expenses for having to respond to Allstate's concerns on this issue. Whatever else may have occurred at the commencement of the hearing, as my letter of February 12, 2008 records, there was an agreement on a Rule 30 Order combining the instant matter with a yet to be filed, but anticipated arbitration.

Mr. Tendenilla has changed his mind. Whether or not he is entitled to do so will not be decided in this case. In any event Allstate has acquiesced in that change of mind, subject to submissions on consequential expenses at the appropriate time. I will consider this issue along with anything else that is relevant including the extent to which I agree that Allstate bore some responsibility for the adjournment of the merits of the hearing in February 2008, at the conclusion of this arbitration.

Mr. Tendenilla’s argument turns on the absence of any evidence of the agreement that I concluded was made regarding the treatment of the anticipated second application for arbitration.

It is not clear from the material provided or the submission of Mr. Tendenilla what kind of evidence there ought to be of such an agreement. The discussion occurred on the telephone. As with most of the multitude of procedural and other interlocutory agreements that are made in arbitrations on a daily basis there was no direction that the parties reduce their agreements to writing. Instead, I recorded what I had understood to be the parties’ procedural agreement.

Mr. Tendenilla submits that he has no problem with the February 12 , 2008 letter, but submits that it does not contain an actual agreement. Moreover the condition precedent to there being a need for a Rule 30 Order did not occur, that is Mr. Tendenilla did not file a second application for arbitration and accordingly there could be no agreement.

I have considered the submission of Mr. Tendenilla and have concluded that it is entirely without merit.

The evidence of the agreement is my recollection of the telephone conference on February 12, 2008 as recorded in my letter of the same date. The letter describes itself as a record of the discussion held that day. It records an agreement even if the word does not appear in relation to the joining of the two Applications. If that is not what Mr. Tendenilla understood to be the agreement then it was incumbent on him to raise it as soon as he was aware that an error had been made, if that is what occurred. Mr. Tendenilla did not question the content of that letter in any respect until late May, three months after the fact.

The submission that the “condition precedent” to the agreement did not occur and therefore there could be no agreement misses the mark completely it seems to me. The agreement was that a second application for arbitration would be brought in respect of a number of issues related to a second accident and once brought they would be added to the instant arbitration and dealt with in the hearing adjourned to July 2008. It does not follow from the fact that Mr. Tendenilla changed his mind about the “condition precedent” to the need for a Rule 30 Order, that there was no agreement or no evidence of an agreement. This submission amounts to nothing more than saying that Mr. Tendenilla is entitled to render the agreement void ab initio merely by changing his mind about sticking with it. That cannot be right.

Given that the evidentiary basis of my determination that there was an agreement is clear, there is no need for an inference of any kind to be drawn concerning the basis for my conclusion and in my view the entire theoretical basis for this Motion falls away. That is, the only reasonable interpretation of the February 12, 2008 letter is that I understood, based on the discussions that day, that there was a procedural agreement made to add, pursuant to Rule 30, a soon to be filed application for arbitration. Given these circumstances it seems to me entirely unreasonable to find that an informed person considering the issue realistically and practically would conclude that it is more likely than not that I would not decide the issues between the parties in this hearing, fairly.

For these reasons the Motion is dismissed.

EXPENSES:

Neither party sought their expenses of this Motion. As this was an interlocutory dispute I leave the expenses consequences of it to the conclusion of the hearing.

August 13, 2008

David Muir Arbitrator

Date