Michael Lawrence Madonik v. Pilot Insurance Company, 2008 ONFSCDRS 152

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2008 ONFSCDRS 152

Appeal P08-00031

Appellant

and

Respondent

BEFORE:

David Evans

Dr. Michael Lawrence Madonik for himself

Catherine Korte for Pilot Insurance Company

By written submissions

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Dr. Madonik’s appeal of the production order contained in the arbitrator’s pre-hearing letter of July 25, 2008 is rejected pursuant to Rule 51.2 of the Dispute Resolution Practice Code, Fourth Edition.

September 18, 2008

David Evans Director’s Delegate

Date

I. NATURE OF THE APPEAL

Dr. Madonik appeals the production order set out in the arbitrator’s pre-hearing letter dated July 25, 2008.

II. BACKGROUND

As set out in the pre-hearing letter, Dr. Madonik was injured in an automobile accident on December 24, 1997, and sought various benefits. The pre-hearing was held on July 24, 2008 in relation to Dr. Madonik’s claim for medical benefits pursuant to s. 14 of the SABS–1996.¹

A dispute arose during the pre-hearing regarding productions. While Pilot agreed to a number of productions, Dr. Madonik agreed only to provide materials or authorizations to obtain them relating to his complaint about Dr. Oshidari to the Financial Services Commission. He objected to producing the documents requested by counsel for Pilot, Ms. Korte, in her letter to him of April 22, 2008, on the basis that Pilot had previously settled some claims for treatment expenses without obtaining a release from him.

By way of background, in a letter of July 9, 2008 to the Commission, Dr. Madonik stated that he would not provide any documentation prior to February 26, 2007 when, according to him, Pilot had paid his previous claims and so had admitted “total liability,” meaning that the requests for documents prior to that date were “considered both improper and frivolous.”

In the result, the arbitrator ordered Dr. Madonik to sign authorizations within 15 days of the pre-hearing to permit Pilot to obtain a number of documents – essentially those set out in Ms. Korte’s April 22, 2008 letter.

In doing so, the arbitrator first noted that Rule 36.1 of the Dispute Resolution Practice Code provides that no statements made for the purpose of a settlement or any offer to settle made during a pre-hearing discussion or settlement conference shall prejudice any position the parties may take in any subsequent proceeding. She then noted that, in filing his Application for Arbitration, Dr. Madonik had commenced a new proceeding, and so the normal rules for production and exchange of documents by the parties applied. She also referred to Practice Note 4, “Exchange of Documents,” which sets out the types of documents ordinarily produced in preparation for an arbitration proceeding

The arbitrator then noted that the principal criteria for determining whether documents should be produced are the relevance of the information in them to the issues in dispute and their reasonable necessity for a full and fair hearing of the dispute.

The arbitrator further referred to the particular claims for treatment expenses being made by Dr. Madonik. She noted that, for him to be entitled to the benefits, he must establish that “the treatment is required because of the accident, which is an issue of causation; specifically, the accident must have been a significant contributor to the impairment for which treatment is sought; and that both the treatment and cost is reasonable and necessary.” She concluded that information about Dr. Madonik’s medical history in the year prior to the accident was directly relevant to the issue of causation and therefore producible.

III. ANALYSIS

In his Notice of Appeal, Dr. Madonik asks that the production order be withdrawn, that the arbitration proceed on an uncontested basis, and that the production order be stayed pending the outcome of the appeal. I requested written submissions from Pilot and from Dr. Madonik to determine whether or not to reject the appeal. Rule 50.2 of the Code provides that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless the Director or his delegate orders otherwise. Furthermore, Rule 51.2(c) provides that the Director or his delegate may reject an appeal if “it is from a preliminary or interim order that does not finally decide the issues in dispute.” A production order at a pre-hearing is exactly that type of order. Accordingly, Dr. Madonik has to persuade me that I should exercise my discretion in his favour. Ordinarily, I would reject an appeal of this kind summarily in a letter decision, but since Dr. Madonik is unrepresented, I have set out the reasons for its rejection in some more detail.

As has often been noted, as in Allstate Insurance Company of Canada and Torok, (FSCO P01‑00021, May 29, 2001), the criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether the appeal or hearing will prejudice either party.

I see nothing novel in the arbitrator’s production order. The arbitrator’s reasons for her order conform to Commission practice. Accordingly, absent other considerations, the appeal on its face has little strength and raises no novel issues.

Dr. Madonik submits that the arbitrator did not recognize matters he raised at the pre-hearing, namely Pilot’s alleged breach of two sections of the SABS. He submits that Pilot breached s. 42 (the insurer’s examination) by sending him to someone who was not an expert. He also alleges that it breached s. 38(13) by disclosing the resulting report to parties not entitled to see it. These are irrelevant considerations, as they are not pre-requisites to allowing a production request.

In any event, the arbitrator did recognize the issues he raised, in that she noted that Dr. Madonik undertook to provide materials relating to his complaints about Dr. Oshidari, as already noted above, and in production 11, she ordered “[a] complete copy of the College of Physicians and Surgeons’ file regarding the complaint made to it by Dr. Madonik about Dr. Oshidari, including all correspondence between Dr. Madonik and the College and any documents regarding Dr. Madonik’s appeal.” She therefore issued an interim order in consideration of Dr. Madonik’s concerns.

Furthermore, it has never been the law at the Commission that an insurer is automatically liable for any alleged breaches of the SABS. While there are provisions that sometimes an insurer is required to pay a benefit pending a resolution of the dispute (see s. 38(12.2) of the SABS, for example), the dispute still has to proceed through the normal dispute resolution process. The arbitrator’s order was a perfectly ordinary type of order within that process. Besides, I see no jurisdiction to order a matter to proceed on an uncontested basis where a Response has been properly filed. Yet again, I see no strength or novelty in that aspect of the appeal.

Dr. Madonik submits that the arbitrator failed to recognize that, by paying the benefits up to February 26, 2007, Pilot admitted liability in paying the benefits without a release and so is not entitled to any documentation prior to that date. However, that is simply Dr. Madonik’s position and belief and not a basis upon which to overturn the arbitrator’s order. It is up to an arbitrator to decide if, indeed, any settlement has any bearing on the issues being disputed. In this case, the arbitrator was swayed by the question of causation, which is a legitimate criterion.

Finally, Dr. Madonik submits that Pilot has failed to complete its undertakings. That is for the pre-hearing arbitrator to deal with – as she noted in her letter – and not me.

Accordingly, I see no strength or novelty to the appeal, and prejudice to the parties would result from the expense and delay of a completely unnecessary appeal.

The appeal is rejected. It follows that the pre-hearing production order is not stayed.

September 18, 2008

David Evans Director’s Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.