Certas Direct Insurance Company v. Amma Kwatemaa, 2008 ONFSCDRS 29

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2008 ONFSCDRS 29

Appeal P06-00022

OFFICE OF THE DIRECTOR OF ARBITRATIONS

CERTAS DIRECT INSURANCE COMPANY Appellant

and

AMMA KWATEMAA Respondent

BEFORE: David Evans

REPRESENTATIVES: Ryan M. Naimark for Certas Direct Insurance Company Carmine Tiano for Ms. Kwatemaa

HEARING DATE: March 29, 2007

APPEAL ORDER

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

1. The appeal of the arbitration order dated June 2, 2006 is dismissed and the order is confirmed.

2. If the parties are unable to agree about expenses of this appeal, a hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

February 28, 2008

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Certas appeals the arbitrator’s finding that Ms. Kwatemaa was involved in an accident.

II. BACKGROUND

The term “accident” is defined in s. 2 of the SABS–1996¹ as “an incident in which the use or operation of an automobile directly causes an impairment….” However, the issue in this case was factual and did not turn on an interpretation of that definition. The only issue at the preliminary arbitration hearing was whether Ms. Kwatemaa’s red Toyota was struck by a green Infiniti on July 14, 2002. Certas alleged that Ms. Kwatemaa’s version of the events leading up to the accident did not make sense and that inconsistencies in her evidence about the accident combined with its own engineering evidence supported its view that the accident was staged. Certas submits that unfairness or misdirection in the arbitrator’s treatment of its evidence, as well as her failure to give sufficient reasons, amount to a question of law,² giving me jurisdiction to either reverse the decision or remit it for a new hearing. For the reasons that follow, I am not persuaded that the arbitrator erred in law.

Ms. Kwatemaa testified that in March 2002, she was invited to a party scheduled for July 14, 2002 by her friend “Lydia,” whose last name and telephone number she did not know. Some weeks prior to the party, “Rita” — a co-worker — gave Ms. Kwatemaa money to give in turn to Doris Sarpong, Ms. Kwatemaa’s hairdresser, who would be at the party. However, on the day of the party, instead of giving Doris the money at the party, Ms. Kwatemaa left the party with Doris and Ms. Florence Appiah-Kubi, to get the money at her apartment. Doris and Florence planned to return to the party by bus from Ms. Kwatemaa’s apartment. The accident happened on the way to the apartment. Although Certas found this sequence of events unbelievable, the arbitrator did not, stating that Ms. Kwatemaa “was cross-examined on these points and her testimony was not shaken.”

To support its view that the accident was staged, Certas pointed to inconsistencies in the evidence regarding the seating arrangements in Ms. Kwatemaa’s Toyota and the half hour lapse of time from leaving the party to the collision a couple of blocks away. The arbitrator found these inconsistencies to be minor considering the time that had elapsed between the accident and the hearing.

With respect to how the accident occurred, the arbitrator set out Ms. Kwatemaa’s evidence as follows:

The Applicant testified that she turned at St. Andrews Blvd. onto Islington Avenue and drove south along Islington at a speed she estimated at 40-60 km/h. The Infiniti was travelling east along Kingsview Blvd. and attempted to turn left onto Islington Avenue (i.e., to travel north). As the Infiniti was crossing the path of southbound traffic it collided with the Applicant’s Toyota.

The arbitrator noted that Ms. Kwatemaa’s credibility was critical to the case and, as will be discussed below, found her credible.

Although Ms. Kwatemaa was the only person to testify on her behalf, the arbitrator did not draw an adverse inference from the lack of corroboration because she found Ms. Kwatemaa made reasonable attempts to get other witnesses to attend, including Doris and the owner of the green Infiniti, Ms. Abdi Fatuma. The arbitrator found other evidence that the accident was not staged, including that the other passenger in Ms. Kwatemaa’s vehicle, Florence Appiah-Kubi, advised Certas in 2002 that she was injured in an accident and was sent an Application for Accident Benefits. She also found it corroborating that the accident location and direction of travel of each car in Ms. Fatuma’s Collision Reporting Centre Report were consistent with Ms. Kwatemaa’s CRC Report. The arbitrator rejected as speculative Certas’s view that the accident was staged because Florence was uncooperative and unresponsive in helping Certas with its investigations.

Certas argued that Ms. Kwatemaa’s evidence about how the accident occurred conflicted with statements it had obtained from two of the three passengers in the Fatuma Infiniti.³ These passengers — Ms. Najma Osman and Mr. Abdillai A. Mohamed — indicated that Ms. Fatuma’s Infiniti was on Islington turning into a side street, not on a side street turning onto Islington. Both statements were given at the offices of their legal representatives, Pace Law Firm. The arbitrator attached no weight to these hearsay statements “since the declarants were not cross-examined on them.”

Certas relied on evidence obtained by ING, the insurer of Ms. Fatuma’s Infiniti, that the v‑shaped damage to the Infiniti’s bumper suggested impact with a pole and not with the side of a car. Ms. Fatuma’s representative had advised the ING adjuster that this damage pre-dated the accident, as reflected in its adjuster’s log note. The arbitrator accepted this hearsay statement to the effect that the Infiniti was damaged before the accident, but did not accept how it occurred: “Although ING’s log notes indicate that the representative said Ms. Fatuma struck a wall, it is possible that the representative misspoke himself or misunderstood information that was relayed to him.”

Certas further relied upon the accident reconstruction report of Mr. Al Jenkins, a former police officer, and the engineering report and testimony of Mr. Mario Smolej, a mechanical engineer, whose testimony also dealt with the v-shaped damage on the Infiniti. The arbitrator dismissed as unreliable their findings that the accident was likely staged.

III. ANALYSIS

Certas submits that the arbitrator erred in a number of ways, but in essence the question is whether the arbitrator gave sufficient reasons for her conclusions.

Certas submits that the arbitrator failed to provide sufficient reasons for rejecting the Infiniti passengers’ statements as hearsay, considering that the strict rules of evidence do not apply to Commission hearings. As stated in Ahmed and Allstate Insurance Company of Canada, (OIC P96‑00068, June 23, 1998), “[h]earsay evidence is allowed but the considerations of fairness, reliability and relevance underlying the rules should inform the arbitrator’s approach” [p. 10]. Certas submits that the statements were reliable, as they were prepared with the assistance of counsel; they were clearly relevant; and they were produced fairly, in that they were filed at the suggestion of Ms. Kwatemaa’s counsel when ING produced its file at the hearing. Certas also submits that the arbitrator’s rejection of the statements because their creators were not cross-examined on them is unfair because cross-examining on them was Ms. Kwatemaa’s job.

Certas submits that the arbitrator was unfair in her treatment of the different statements because she rejected the statements relied on by Certas but accepted as probative those relied on by Ms. Kwatemaa: the CRC report prepared by Ms. Fatuma (the Infiniti’s owner) and the adjuster’s log note. Certas submits that the latter were hearsay and were not cross-examined on either.

As to the log note, Certas submits that the arbitrator engaged in pure speculation when she stated that it was “possible that the representative misspoke himself or misunderstood information that was relayed to him” despite there being no evidence on that point from Ms. Fatuma or her representative.

Certas submits that the arbitrator failed to properly address the engineering evidence of Mr. Smolej that even if there was pre-existing v-shaped damage to the front of the Infiniti in an earlier collision, it would have been flattened out and no longer distinct in the second collision. Certas relies on this statement from Hernandez and Zurich Insurance Company, (FSCO P98‑00045, April 12, 1999): “Arbitrators have a broad authority to evaluate the evidence, including expert opinions, but they must provide the parties with a reasonable explanation of their findings” [p. 5]. It also submits that, in general, the arbitrator misstated, misapprehended and misunderstood Mr. Smolej’s evidence on crucial points such as the speed of impact and also disregarded it for irrelevant reasons.

Certas makes the same point regarding the Jenkins report. For instance, the arbitrator noted that Mr. Jenkins was not advised of the pre-existing v-shaped damage to Ms. Fatuma’s vehicle. Certas submits that in making that statement, the arbitrator already assumed that there was a previous accident, when that was one of the very issues before her, so it was unfair to criticize the author for not referring to it. The arbitrator also discounted the report because it states that the Infiniti was traveling westbound when Islington can only be approached eastbound on Kingsview. Certas submits that the arbitrator focused on a typographical error and ignored the rest of the report, which had the mechanics of the alleged accident correct.

Certas submits that the arbitrator effectively reversed the onus. For instance, the arbitrator accepted that Ms. Kwatemaa had made efforts to obtain witnesses to support her case. However, there were five other witnesses that she could have called, but provided no explanation for not calling them. These witnesses included Lydia, at whose apartment the party was held. Although Ms. Kwatemaa claimed she had no way of reaching her, she knew where she lived, since she had been to Lydia’s apartment. Another important witness was Rita, who owed Doris money. She was the key to why Ms. Kwatemaa, Doris and Florence were in Ms. Kwatemaa’s car. There were also the three passengers in the Fatuma Infiniti. Certas submits that the arbitrator had to be more critical of Ms. Kwatemaa’s evidence and provide better support her finding of credibility. Certas relies on this passage at p. 9 from TTC Insurance Company Limited and Wootton, (FSCO P04‑00004, November 2, 2004):

Credibility was at the core of this dispute. Ms. Wootton claimed to have been injured in an accident, but did not bring any independent evidence to corroborate the details of her account. While this did not prevent her from proving her claim, her credibility was crucial. In my view, it was not enough for the Arbitrator to find possible explanations for the frailties in her evidence — the pain and shock of the incident and pain medication — and then make a general assessment that her testimony was “credible with regard to the details of the accident.” He had to explain why he was prepared to rely on her later version of events.

Certas submits that in this case as well, the arbitrator simply made a blanket statement of credibility and only referred to two minor inconsistencies in Ms. Kwatemaa’s evidence while ignoring more significant inconsistencies. Certas referred in particular to Ms. Kwatemaa’s conflicting evidence on how she had obtained Doris’s home phone number.

Although Certas has raised a number of concerns, I am not persuaded they establish an error of law. The Ontario Divisional Court in Kanareitsev v. TTC Insurance Company Ltd. (February 6, 2008), Court File No. DC-060081917-00, found that the appropriate standard of review when considering the adequacy of reasons is correctness and overturned a decision by a Director’s Delegate ordering a rehearing. The Director’s Delegate had found that the reasons in that case did not adequately explain the arbitrator’s rejection of the insurer’s case, and, as the Divisional Court put it, the “purported ‘gaps in the Arbitrator’s reasoning on the underlying causation question’ led the Director’s Delegate to the conclusion that a new hearing had to be ordered” [para. 30]. At para. 28, the Court reiterated the factors to be considered in determining the adequacy of reasons:

These include the decision-maker setting out its findings of fact and the principal evidence upon which those findings were based. The reasons must address the major points in issue; it is insufficient for the decision-maker to summarize the parties’ positions and “baldly state its conclusions”; and the reasoning process followed must be set out and reflect consideration of the main relevant factors.

In that regard, Certas submits that the arbitrator simply made a blanket statement regarding Ms. Kwatemaa’s credibility. However, while the arbitrator’s reasons are brief, they do not constitute a bald conclusion:

The credibility of the Applicant and her evidence is critical to this case. In assessing the Applicant’s credibility, I have considered the following factors: her demeanour, her apparent powers of observation, her apparent powers of recall, her attitude while testifying, her ability to resist the tug of self interest, the inherent plausibility of her evidence within itself, and the consistency of that evidence standing alone and as compared to other evidence.⁴ The Applicant testified in a direct and forthright manner. She did not appear to embellish or exaggerate her evidence. Her evidence of what occurred on the night in question was not shaken in cross-examination. Based on the foregoing, I found that the Applicant was credible.

I am also mindful of the following comments from the Divisional Court in Kanareitsev:

29Particularly when results turn on the first instance decision maker’s view of the credibility of witnesses and involves a fact-driven analysis, appellate review must take “proper account of the distinct advantage” of the first-instance decision maker’s assess­ments. The appeal judge must not try the case de novo or simply substitute his or her views for those of the trial judge….

31….The nature of the proceedings was highly fact-intensive. There was a significant amount of documentary evidence tendered, and a number of witnesses testified. The credibility and reliability of the evidence were very much in issue, and the arbitrator was charged with the responsibility of determining these issues.

32The Arbitrator’s decision reviewed much of the evidence that had been placed before her and offered conclusions as to which evidence she accepted and why. In our view, it was well-reasoned and addressed the factors relevant to the issue in dispute. While she may not have engaged in a detailed analysis of each and every aspect of the major points in issue, her reasons refer to the principal evidence she relied upon and provide a justification for her conclusions.

The Divisional Court has previously overturned Commission appeal decisions dealing with an arbitrator’s view of the credibility of witnesses or involving a fact-driven analysis. In General Accident Assurance Co. of Canada v. Singh, [2001] O.J. No. 2524, the Divisional Court found that the Director’s Delegate lost jurisdiction when she considered a matter of mixed fact and law, namely the arbitrator’s finding of wilful blindness or carelessness on the part of Mrs. Singh, thus precluding the operation of the defence non est factum. In State Farm Mutual Automobile Insurance Co. v. Movahedi, [2001] O.J. No. 5099, the Divisional Court stated at para. 3:

The Delegate criticized the arbitrator’s findings of credibility on the basis that some of the findings were based on factual errors or failed to consider all the evidence. Not reciting all the evidence does not mean the arbitrator failed to consider it. We find there was ample evidence before the arbitrator to support his findings of credibility as described in his decision.

Accordingly, I am not persuaded there is a basis to overturn the arbitrator’s findings on credibility. As to other elements she might have discussed in that regard, such as the inconsistency Certas referred to, the lack of discussion does not mean that the arbitrator failed to consider it. It was for the arbitrator to weigh that evidence.

Similarly, it was the arbitrator’s role to assess and weigh the experts’ reports. While Certas believes the arbitrator placed too much weight on what could be a simple typographical error in the Jenkins report, that is not a matter for me to decide. There was evidence before the arbitrator on which to base her decision. The arbitrator spent more time on the Smolej report, so it follows that I would have even less reason to overturn her consideration of it. While Certas submits the arbitrator made a number of errors in the assessment of the report, it in turn asks me to make a hyper-detailed review of the evidence that is not appropriate — such as whether the engineer could zoom in on the JPEG image of the Infiniti bumper to determine whether or not there was paint transfer. That is not my role.

While I agree with Certas that the arbitrator engaged in speculation when she stated — with respect to the ING adjuster’s note about the source of the damage to the Infiniti — that it was “possible that the representative misspoke himself or misunderstood information that was relayed to him,” this was more in the nature of a passing comment. The arbitrator dealt with the matter fully in her analysis of Mr. Smolej’s report and testimony, and accordingly, I am not persuaded her decision actually turned on that comment.

The essence of Certas’s case was the theory that Ms. Kwatemaa and Ms. Fatuma conspired to stage an accident. The weakness of this theory was that, as the arbitrator stated at the end of the decision: “There was no evidence to suggest that the Applicant knew either Ms. Fatuma or any of the passengers in her vehicle, or conspired with any of them to stage an accident.” Lacking such evidence, Certas submitted that Ms. Kwatemaa had not proved she was in an accident, and it presented its own expert evidence and other somewhat circumstantial evidence to bolster the point. However, while the experts had their theories, the arbitrator had the evidence of the applicant. On balance, I am not prepared to find the arbitrator erred in preferring the latter over the former.

In conclusion, I am not persuaded that I have the jurisdiction to overturn the arbitrator’s decision. Ultimately, it was for her to decide if the circumstances leading up to the accident as stated by Ms. Kwatemaa were credible or not. The arbitrator in her decision reviewed much of the evidence that had been placed before her, made findings of fact as to which evidence she accepted and why, and while she may not have engaged in a detailed analysis of each and every aspect of the major points in issue, her reasons refer to the principal evidence she relied upon and provide a justification for her conclusions.

The appeal is dismissed and the arbitration decision is confirmed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, a hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

February 28, 2008

David Evans Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Subsection 283(1) of the Insurance Act provides that a party to an arbitration may appeal the order of the arbitrator on a question of law.
3. 3On appeal, Certas did not place much emphasis on a statement reported to have been given by Doris Sarpong as part of an In-Home Occupational Therapy Assessment Report.
4. 4Hawley v. Bapoo, 2005 CanLII 36451 (ON SC), [2005] O.J. No. 4328, QL at para. 6 (Ont. S.C.J.). [Footnote in the original. The decision was subsequently varied, but the Court of Appeal did not disturb the credibility findings: see 2007 ONCA 503, [2007] O.J. No. 2695.]