Patience Sarpong and Victoria Owusu v. TD Home and Auto Insurance Company, 2009 ONFSCDRS 11

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2009 ONFSCDRS 11

Appeal P08-00003 and P08-00004

OFFICE OF THE DIRECTOR OF ARBITRATIONS

PATIENCE SARPONG AND VICTORIA OWUSU

Appellants

and

TD HOME AND AUTO INSURANCE COMPANY

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Mr. Murray Tkatch and Mr. Kwaku Bona for Ms. Sarpong and Ms. Owusu

Mr. Andrew Grayson for TD Home and Auto Insurance Company

HEARING DATE:

November 10, 2008

APPEAL ORDER

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

1. The Arbitrator's decisions dated January 17, 2008 and his expense decision of May 22, 2008 are confirmed and the appeals herein are dismissed.

2. If the parties are unable to agree on the legal expenses of these appeal proceedings, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003).

February 2, 2009

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Ms. Patience Sarpong and Ms. Victoria Owusu (the “Appellants”) were injured in a June 2, 2004 car accident and applied to their first-party automobile insurer, TD Home and Auto Insurance Company (the “Respondent”), for statutory accident benefits payable under the Schedule.¹

In his January 17, 2008 decisions, Arbitrator Muir (the “Arbitrator”) dismissed the Appellants’ claims for income replacement benefits (“IRBs”) and a special award. In his further May 22, 2008 decision, the Arbitrator awarded the Respondent its legal expenses of $3,604.01 against Ms. Owusu and $8,409.35 against Ms. Sarpong.

My March 7, 2008 interim decision dismissed the Appellants’ motion for a stay of the Arbitrator’s orders, there being nothing at that point to stay. On the express consent of both parties, I combined these appeals. My further September 18, 2008 interim decision dismissed the Appellants' motion that the Respondent be compelled to order the transcripts of the arbitration hearing. Legal expenses were deferred to the final resolution of these appeals.

II. BACKGROUND AND ANALYSIS

The Appellants submit that the Respondent’s case was that they were part of a larger scheme to defraud several insurance companies. The Appellants deny these allegations. They submit that the thrust of their cases was an attack on the credibility of investigators for the Respondent, other insurers and the Insurance Bureau of Canada, the entire investigation being in breach of the Personal Information Protection and Electronic Documents Act 2000, c. 5 (“PIPEDA”).

The Appellants ask that (1) their appeals be allowed, (2) all aspects of the Arbitrator’s decisions

be set aside, and (3) their respective IRB and special award claims be granted, in addition to their

legal expenses of these appeals. In the alternative, the Appellants request that the pre-hearing orders herein regarding joinder and third party information be remanded to an arbitrator to be properly addressed and that a new hearing be held. In the further alternative, the Appellants ask that their IRB claims be varied to WAD (Whiplash-Associated Disorders) IIs.

The Respondent asks that the appeals be dismissed with costs against the Appellants. It submits that subsection 283(1) of the Insurance Act, R.S.O. 1990, c. I.8 and Rule 50.1 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003) (the “Code”) restrict appeals to errors of law and that the Appellants are appealing findings of fact. The Respondent further submits that the standard of review for findings of fact is palpable and overriding error and that the Arbitrator made no such error, his conclusions being supported by the evidence.

At the oral appeal hearing, the Appellants indicated they were also appealing the Arbitrator’s May 22, 2008 expense decision. The Respondent stated that it presumed this was the case.

The Appellants’ general submission is that the Arbitrator “completely failed to apply Canadian jurisprudence in arriving at his decision … Such a departure was so gross and significant that his decision amounted to a miscarriage of justice.” In large measure, the specific grounds for these two separate appeals overlap. In addressing each ground for appeal in the order presented by the Appellants, I will note any argument pertaining to a specific Appellant.

1. Failure to Apply the Standard of Proof

The Appellants submit they had an absolute right to know from the beginning the case they were

to meet. They maintain that the Arbitrator’s decisions neither enunciate nor apply the applicable standard of proof. Accordingly, the Appellants argue that they failed to receive a fair hearing.

The Appellants submit that the civil standard of proof is a balance of probabilities, but when criminal conduct is alleged, the balance of probability must be determined in light of clear and cogent evidence. Relying on R. v. C.L.Y. (2008), 2008 SCC 2, 289 D.L.R. (4th) 1, the Appellants submit that even a remote reference to the standard of proof will not suffice.

The Appellants cite Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19, [2003] 1 S.C.R. 226, that the Arbitrator was required to make findings of fact, select the appropriate standard of proof and apply that standard of proof in determining whether the alleged impropriety had been proven.

The Respondent submits that its primary argument at arbitration was that the Appellants’ claims were fraudulent or there had been material misrepresentation pursuant to section 48 of the Schedule. The Respondent agrees that it had the onus of proof on a standard higher than balance of probabilities, namely clear and cogent evidence, regarding this aspect of the arbitration hearing. However, its alternative defence was that the Appellants had not met the prerequisites for entitlement and that their claims should be dismissed for lack of credible evidence.

The Respondent argues that the Arbitrator’s reasons enunciated his concerns regarding the Appellants’ evidence and that he correctly maintained the burden of proof on a balance of probabilities on the Appellants to prove their entitlement to IRBs and to a special award.

I am not persuaded that the Appellants did not know the case they had to meet. The September 13, 2006 pre-hearing letters in both these proceedings clearly set out the disputed issues, as specifically identified and agreed to by all parties. In addition to the Appellants both seeking pre-judgment interest, their legal expenses and a special award, the pre-hearing letters note Ms. Owusu seeking weekly IRBs of $340, Ms. Sarpong $400.

What are being appealed here are not the Arbitrator’s decisions regarding the Respondent’s allegations of fraud, which he rejected, but rather the Arbitrator’s decisions as to IRB and special award entitlement. Regarding Ms. Sarpong, the Arbitrator disallowed her claims not because of a finding that she was a participant in a conspiracy, but:

… primarily because of the profound credibility problems arising from her own evidence. To put it plainly, it is difficult because of the inconsistencies, gaps and admitted untruths in her evidence to give it much credit. It is against this backdrop that I have considered the extremely limited evidence in support of her claim to being disabled from work for 16 months as a result of impairments sustained in a motor vehicle accident. Despite the fact that TD Home did not vigorously challenge her assertion that she was unable to work for that period, at the end of the day there is little or no credible evidence of an inability to perform her pre-accident employment as a result of injuries sustained in the accident nor any credible evidence respecting the duration of any such impairments.

The Arbitrator detailed particulars in this regard, including that following the accident and while alleging impairment, including impairment from her own housekeeping duties, Ms. Sarpong was also claiming to provide housekeeping services to an earlier accident claimant. The Arbitrator concluded that he was unable to find any basis for an IRB award. There being no finding of IRB entitlement, the Arbitrator denied Ms. Sarpong’s claim for a special award.

Regarding Ms. Owusu, the Arbitrator determined on the basis of “a great many contradictions and gaps” in her evidence, most importantly as to what, if any, impairments she may have suffered as a result of the accident, that it was difficult to give any credit to her evidence. The Arbitrator specially noted that Ms. Owusu was:

… extremely vague about her post accident health. Ms. Owusu said almost nothing

about the course of her recovery except to say that after 8 months she felt able to return to work, and did so. She did not say what essential tasks of her work she could not perform.

The Arbitrator, after reviewing the limited medical evidence, stated that “[o]n balance and in

considering all of the evidence, I find that Ms. Owusu is not entitled to an income replacement benefit.” Accordingly, a special award was also denied.

C.L.Y. was a non-jury criminal trial case. Abella J. held that a trial judge is presumed to know a principle as elementary as the presumption of innocence. Fish J., in partially concurring reasons, stated that a “correct statement of the burden of proof can scarcely save its evident misapplication, as in this case.” Mirroring this, Abella J., citing R. v. W.(D)., 1991 CanLII 93 (SCC), [1991] 1 S.C.R. 742, stated that “[t]he key is whether the correct burden and standard of proof were applied, not what words were used in applying them.”

While the Arbitrator may not have specifically stated that regarding entitlement the onus of proof was on a balance of probabilities, reading his reasons in their entirety, there is no doubt that he selected and applied the correct standard of proof. In both of his decisions, the Arbitrator quoted Pratt and Whitney Canada Inc. and Ministry of Labour and John Machado, [1992] OESAD No. 246 regarding the usual civil standard as against a civil case of fraud. Regarding Ms. Owusu, the Arbitrator specifically used the words “on balance.” It is hardly reasonable to presume that the Arbitrator applied a different standard of proof for Ms. Sarpong, the cases being heard together and the two decisions being released the same day.

2. Onus of Proof

The Appellants submit that the Arbitrator erred in failing to indicate that the onus of proof, including the assessment of credibility, lay on the Respondent throughout and that he erred in shifting the onus onto the Appellants regarding credibility and disability. The Appellants argue that the only reason they knew of for the Respondent’s refusal of their claims was its allegations of fraud and criminal conspiracy. The Appellants cite Brar Jachimowicz and Canada Inc., 2004 BCSC 744, 13 C.C.L.I. (4th) 317, that in a civil case of criminal allegation, there is a legal, not an evidentiary burden, that remains on the insurer throughout and does not shift to the claimants.

The Appellants submit they did everything required to support their respective claims and that their applications had been “perfected.” The Respondent, they argue, failed to arrange section 42 insurer medical examinations (“IMEs”), failed to provide notices of stoppage, failed to provide OCF-9 Explanations of Benefits Payable and failed to provide the Appellants their right to a designated assessment centre (“DAC”) examination. There was no medical evidence from the Respondent, nor was there any job site or functional abilities analysis conducted. The Appellants submit that for an insurer to shift the onus of proof back to a claimant once an application has been perfected, it must first have “perfected” its denial.

The Appellants rely on Coombe v. Constitution Insurance Co. (1980), 1980 CanLII 1715 (ON CA), 29 O.R. (2d) 729 (C.A.), leave to appeal to the Supreme Court of Canada refused, (1981) 35 N.R. 355, wherein Wilson J.A., writing for the majority, stated:

It follows from this analysis of the statute and of [the declaration made by the court] that the insurer cuts off weekly benefits to the insured at its own risk. It is not, in my view, for the plaintiff to establish that he continues week by week to be permanently and totally disabled. It is for the defendant to establish that he has ceased to be so and that [the declaratory order] is therefore no longer binding on it … It is, in my view, unthinkable that an insured be put under an ongoing burden to establish his permanent

and total disability and I cannot think that the Legislature could have intended it.

The Appellants note the comment of the Ontario Court of Appeal in Monks and ING Insurance Company of Canada, 2008 ONCA 269, 90 O.R. 3rd 689, that “[a]s Wilson J.A. observed in Coombe at p. 736: ‘The legislation was designed for the protection of the insured and should be construed in the way most favourable to him.’” The Appellants argue that the burden of proof was not merely on the Respondent to prove, on a balance of probabilities, that they were not entitled to the benefits claimed, but that their claims were “incredible.” The Appellants maintain that they put their cases in first at arbitration only because the Respondent wanted to cross-examine them.

The Appellants further submit that they believed that disability was not in issue in arbitration, the Respondent having never raised it. Rather, the Respondent put all of their “eggs” on fraud, “and we put all our eggs in the basket that the fraud would not be proven.” The Appellants state that they expected that if the Respondent failed on the issue of fraud, the Arbitrator would hold that it was not necessary to address the criteria of entitlement and quantum and find the Appellants entitled to the amounts claimed, ongoing from one week post-accident. Having now won on the issue of fraud, the Appellants ask how were they to know the Arbitrator had shifted the onus of proof back to them and that more medical evidence was required?

The Appellants do not argue that the issues of alleged fraud and/or misrepresentation were preliminary issues, IRB entitlement and quantum to be decided at a further hearing.

The Respondent submits that the Appellants knew the case they faced, being the issues set out by the Arbitrator in his decisions and which were always in dispute. The Respondent argues that it did not have the burden of establishing that the Appellants were not credible. Rather, relying on Shakur v. Pilot Insurance Co. (1990), 1990 CanLII 6671 (ON CA), 74 O.R. (2d) 673 (C.A.), the Respondent submits that the Appellants were required to prove, on a balance of probabilities, their entitlement to the benefits claimed. In determining same, the Arbitrator was required to assess credibility.

I am not persuaded that the Appellants were taken by surprise that disability was in issue in these

proceedings. The Appellants concede that the pre-hearing arbitrator did not misstate the

entitlement issues in dispute and that IRB entitlement is noted as an issue in the pre-hearing

arbitrator’s letters of September 16, 2006 in both of these matters.

There is no indication by the pre-hearing arbitrator that the Respondent’s defense was limited to

the issue of fraud, all other components of entitlement having been conceded. Nor is there any other evidence of such a concession. Rather, the Respondent’s September 6, 2005 Response by Insurer to an Application for Arbitration regarding Ms. Sarpong states, in part:

18. It is the position of TD Insurance that Ms. Sarpong has failed to provide the

appropriate information in order for the insurer to make an informed opinion regarding her qualification for Income Replacement Benefits.

19. It is the position of the insurer that they have insufficient information to make a determination regarding Ms. Sarpong’s entitlement to Income Replacement Benefits as they have not been provided with her proof of income for the four weeks prior to the accident.

Regarding Ms. Owusu, the Respondent’s July 12, 2005 Response specifically challenges that this Appellant was employed as alleged, that she earned the income she says she did in the four weeks prior to the accident and that she was unable after the accident to perform the essential tasks of her employment.

The Appellants provide no case law in support of their theory of “perfected” applications for benefits reversing the onus of proof. Rule 61.09(5) of the Rules of Civil Procedure provides that once an appeal is perfected the Registrar shall place it on the list of cases to be heard. Under Rule 61.13, failure to perfect an appeal within stated time lines allows the respondent to bring a motion to dismiss the appeal for delay. Perfecting an appeal does not alter the onus of proof.

I do not accept that Monks stands for the proposition that once causation is established, the onus shifts to the insurer to disprove entitlement. Rather, Senior Arbitrator Rotter states in Riley v. Pilot Insurance Company, (OIC A-007940, April 15, 1996) that:

. . . Ontario cases [Walls v. Constellation Assurance Co. (1986), 1986 CanLII 7790 (ON HCJ), 17 C.C.L.I. 212

(H.C.J.), Andersen v. Great-West Life Assurance Co. (1987), 1988 CanLII 10389 (ON HCJ), 30 C.C.L.I. 85 (H.C.J.),

etc.] have affirmed that the onus is on an insured to prove disability and corresponding entitlement to benefits. I accept that it remains settled law in Ontario that the onus is indeed on an applicant to establish entitlement to benefits. Certainly numerous decisions of the Commission have upheld this view, with which I agree.

The Ontario Court of Appeal in Shakur stated specifically that:

It is fundamental insurance law that the burden of proof rests on the insured to

establish a right to recover under the terms of the policy. In this case, the burden

rested on the respondent and remained on the respondent to prove on the balance of probabilities that a theft of her jewellery had occurred. That the appellant, in denying the allegation of theft, impliedly alleged that the respondent was fraudulent in putting forward the claim in no way shifted the basic burden of proof resting on the respondent.

I am not persuaded that the principle of consumer protection, by itself, reverses the onus of proof. The Appellants themselves state that section 42 of the Schedule, as an example, does not specifically provide that an insurer’s failure to arrange an IME automatically obligates an insurer to pay the benefit claimed. The Appellants failed to refer me to any other provision upon which they relied that either provides for such a specific result from an insurer’s non-action or in which there was genuine ambiguity in the meaning of the language, as set out in Chilton v. Co-operators General Insurance Co. (1997), 1997 CanLII 765 (ON CA), 32 O.R. (3d) 161 (C.A.), that allowed for such a result.

Coombe, as stated by Arbitrator Bayesky in Bigda and Dominion of Canada General Insurance Company, (OIC A-950890, October 23, 1996), pertained to an insurer’s obligation in light of an existing court order. In the cases before me, there is neither a court order respecting payment nor, indeed, any prior payment of IRBs by the Respondent. Arbitrator Kirsh, in Weatherhead and Jevco Insurance Company, (OIC A96-000069, December 23, 1996), held, where the insured argued he did not have to prove that he continued to be disabled and that the onus was on the insurer to show that he was no longer disabled:

The case cited by the Applicant in support of his position in this regard, Coombe v Constitution Insurance Company,[1980] I.L.R., p. 1060 is clearly distinguishable, from Mr. Weatherhead’s situation. In that case an existing order obligated the Insurer to continue to pay the Plaintiff as long as the Plaintiff was disabled. Such is not the case here.

Arbitrators have consistently held that the burden of proof is on an applicant to meet the test under section 12(1) of the Schedule. Bellina and State Farm Mutual Automobile (May 18, 1995), OIC A-007379; Khanna and Co-operators General Insurance Company (October 24, 1996), OIC A-000243.

I agree. Accordingly, I find the Applicant has the burden of showing he continues to be disabled under section 12(1) of the Schedule.

In any event, it is illogical to presume that the Arbitrator should have, as argued by the

Appellant, ordered in his January 2008 decisions ongoing payment of weekly IRBs claimed

when, in the Arbitrator’s words, “according to Ms. Sarpong, she returned to work in early 2006 and only quit that work when she became pregnant” and Ms. Owusu’s evidence was that she

“returned to work 8 months post-accident – February 2005.”

3. Palpable and Overriding Error in Reviewing the Evidence

The Appellants submit that the Arbitrator determined that these cases would be decided on credibility and that his findings were “completely flawed and failed to convey the established requirements under the jurisprudence.”

The Appellants argue that the Arbitrator was on a “fishing search” to find against them, that he prejudged and “rubber stamped” their cases and was only concerned with identifying contradictions in their evidence, failing to apprise himself of any internal consistency and balance the evidence as a whole. The Appellants submit that credibility is not a test of perfection. In the case of Ms. Owusu, they argue that this is amplified as she was only 16 years old at the time of the accident and 19 years old when she testified.

The Appellants maintain that the Arbitrator failed to mention their witnesses’ evidence or the admissions they say were made by the Respondent’s witnesses. Further, the Arbitrator made improper inferences, invented facts not supported by the evidence (citing a finding as to the distance from Jane Street to Scarlett Road) and based his findings of credibility on hearsay evidence. The Appellants submit that they were not cross-examined and that the Arbitrator failed to ask them questions about the nature of their injuries, their work or their disabilities.

The Appellants rely on Attakora v. Canada (Minister of Employment and Immigration) (F.C.A.),

[1989] F.C.J. No. 444, that critiqued the Board’s “zeal to find weaknesses in the applicant’s story.” The Court held that the Board “should not be over-vigilant in its microscopic examination of the evidence of persons who, like the present applicant, testify through an interpreter.” In R. v. R.C., 2008 ONCA 98, [2008] 77 W.C.B. (2d) 696, the Ontario Court of Appeal held that the trial judge subjected “each of these small pieces of a much larger evidentiary picture to a microscopic and discrete

analysis. That approach is not conducive to accurate fact-finding or fair credibility assessment …

A reading of the trial judge’s lengthy reasons suggest that he missed the forest for the trees.”

The Respondent argues that the Arbitrator reviewed Ms. Owusu’s vague evidence regarding her

post-accident health, her return to activity, the absence of evidence regarding her recovery and why he was not prepared to give any weight to her medical certificates. Regarding Ms. Sarpong, the Arbitrator noted the inconsistencies between her oral evidence and written statements, her bald statements of impairment and critiqued her OCF-3 disability certificates. The Respondent submits that neither Attakora nor R.C. are applicable, the latter specifically being a criminal case where the standard of proof was beyond a reasonable doubt.

The Respondent further submits that the Arbitrator took judicial notice of the distance between Jane Street and Scarlett Road, which any person could determine by referring to a map. In any event, this distance was a non-issue and the Arbitrator stated that there were other issues with Ms. Owusu’s evidence. The Respondent submits that the Appellant “only cites this example because there are no other examples for her to cite.”

I agree that appeals from an arbitrator’s order are now restricted, under subsection 283(1) of the Insurance Act, to questions of law. Even prior to this restriction, Delegate Naylor set out in Kasap and Allstate Insurance Company of Canada, (FSCO P96-00071, March 13, 1998) the standard of appellate review as follows:

It is well established that my role on appeal is not to second guess the arbitrator’s evaluation of the evidence or substitute my own view of the weight to be attributed to it. The arbitrator has the advantage of hearing and observing the witnesses in person. This gives an arbitrator the opportunity to assess the credibility of their testimony and to evaluate the documentary evidence in light of the evidence as a whole. For that reason, factual findings, particularly those that rest on an assessment of credibility, will not generally be disturbed unless the arbitrator has made some serious error, such as ignoring material evidence, considering irrelevant factors or reaching findings that are unsupported on the evidence.

Under the present wording of subsection 283(1), Delegate Makepeace stated in Truong and Lumbermens Mutual Casualty Company / Kemper Group, (FSCO P03-00007, March 9, 2004) that “the test for error of law ‘is whether the decision was based on a material finding of fact that

was not supported by the evidence such that a reasonable tribunal acting judicially and properly

directed in law could not have made the finding in question.’”

The Appellants are essentially asking me to review the evidence presented at arbitration and

draw different factual conclusions from those determined by the Arbitrator. That is not my role. Nor is it my role to engage, with a standard of perfection, in a microscopic analysis of the Arbitrator’s decisions or to “cherry pick” discrete and perfectly reasonable judicial notice of a mileage distance as a basis for palpable and overriding error. Such a measurement is a fact “that can readily be determined or verified by resort to sources whose accuracy cannot be reasonably questioned”² for which judicial notice may be taken. Subsection 16(a) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S. 22 (the “SPPA”) specifically provides that a tribunal may, in making its decision in any proceeding, take notice of facts that may be judicially noticed.

Further, I am persuaded that if the Arbitrator had indeed engaged in the inquisitorial cross-examination of the Appellants that they now argue was required, such intervention would have featured prominently as a ground for appeal in their respective Notices of Appeal.

As discussed further below, there is no prohibition in the SPPA against hearsay evidence. Indeed, the disability certificates upon which the Appellants rely contain Dr. Lo’s hearsay evidence, amongst other things, regarding the Appellants’ complaints of pain and their efforts to return to work. Regarding Ms. Owusu, it is not explained why her adult age when she testified makes the “contradictions, inconsistencies and gaps” the Arbitrator found in her evidence less significant.

The Appellants do not dispute that they did not call any witnesses other than themselves. Their argument that their oral evidence was ignored rings hollow with their alternative argument that they did not feel it necessary to present oral evidence to support their claims of entitlement. I am not persuaded that findings of credibility are simply mathematical equations of whether the verities in one’s evidence outnumber the untruths.

I am further guided by the Ontario Divisional Court decision in State Farm Mutual Automobile

Insurance Co. v. Movahedi, [2001] O.J. No. 5099, that:

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.

The Arbitrator provided a clear and detailed basis for his decisions, supported by the evidence. There is no basis for overturning those decisions on a question of law.

4. Absence of Jurisdiction to Dismiss in the face of an OCF-3

The Appellants submit that the Arbitrator “made a serious reversible error by placing a draconian

burden on the [Appellants] to prove disability when she had provided all that was required, pursuant to an OCF-3.”

The Appellants argue that the Respondent did not challenge their OCF-3s and there was no other medical evidence to challenge or contradict the findings of these disability certificates produced pursuant to the Schedule. Hence, there was no need for the Appellants to obtain any further assessments or to call any other evidence. The Arbitrator was required to accept the OCF-3s on their face and, thus, his decisions exceed his jurisdiction and must be set aside.

In any event, the Appellants submit that they did not know that the OCF-3s were in issue. If the Arbitrator had an issue with the OCF-3s, he should have raised that at the arbitration hearing.

Ms. Sarpong argues that the Arbitrator erred in discounting her OCF-3 prepared one day after the accident and one prepared after her return to work, there being no provision that an OCF-3 cannot be prepared a day after the accident and section 11 of the Schedule allowing a temporary return to work. As well, the Arbitrator treated her differently by saying the corroborating medical evidence took on more significance in her case. Ms. Owusu submits the Arbitrator further exceeded his jurisdiction by dismissing the findings of a medical-rehabilitation DAC.

The Respondent submits that the Appellants had the burden of proof that they had sustained an

impairment that would not allow them to continue to work and that the Arbitrator had the power to decide whether their medical evidence should be given any weight.

The Appellants provided no case law to support their submissions. As stated in my September

18, 2008 decision, Senior Arbitrator Rotter, in Walker and State Farm Mutual Automobile Insurance Company, (OIC A-009905, February 23, 1996), rejected the submission that a DAC assessor’s evidence should be given greater weight or should be accepted unless there was evidence proving the assessor to be clearly wrong, saying:

… In my view, the evidence of a DAC assessor is and remains opinion evidence, which I must weigh carefully in coming to any … Ultimately, the arbitrator has the responsibility of considering all the evidence not just the evidence from the DAC and making a final determination based on his or her best judgement. It is not sufficient to simply accept or adopt the judgement of the DAC assessor, who does not have the legal responsibility or opportunity to hear and weigh all the available evidence in a particular case.

The Legislature has ultimately given the statutory decision-making authority to the arbitrator. I find it would be an abdication of that authority or an inappropriate fettering of discretion to accept the opinion of a DAC assessor in lieu of exercising the authority conferred on me.

I fully agree with these comments and find them equally applicable to OCF-3s. The Arbitrator set out a basis for not accepting Dr. Lo’s evidence, as was entirely within his jurisdiction to do so. I see no basis for interfering with the Arbitrator’s statutory decision-making authority.

The Arbitrator found Dr. Lo’s initial disability certificate for Ms. Sarpong not particularly helpful. Dated the day after the accident, the Arbitrator was not prepared to extrapolate from that any particular period of disability. Dr. Lo’s subsequent August 2006 certificate stated that Ms. Sarpong was still disabled, having made an unsuccessful return to work between December 2005 and February 2006. As noted above, Ms. Sarpong indicated she returned to work in early 2006 and quit only because of her pregnancy.

The Arbitrator indicated he was not inclined to give Ms. Owusu’s OCF-3s any weight. The first OCF-3 indicated that Ms. Owusu’s work limitations were to avoid prolonged standing and bending when there was no suggestion her employment required such activity. The January 2005 OCF-3 suggested that Ms. Owusu was getting worse (extending the initial anticipated nine to twelve weeks of disability to at least a further twelve weeks), which contradicted the Appellant’s oral evidence that she felt better and returned to work in February 2005.

More fundamentally, as stated by Arbitrator Makepeace in Quattrocchi and State Farm Mutual Automobile Insurance Company, (OIC A-006854, September 29, 1997), “[w]here there is no objective evidence of impairment, or the objective evidence does not explain the degree of pain reported by the insured person, the insured’s credibility becomes important.” Dr. Lo’s diagnoses of essentially soft-tissue injuries for both Appellants warranted the Arbitrator’s assessments of credibility. I find nothing “draconian” in such a process.

5. Breach of Procedural Fairness

The Appellants submit that it was a breach of procedural fairness for the Arbitrator to draw adverse inferences against them when he failed to cross-examine or question them, thereby violating the rule in Browne v. Dunn (1894), 1893 CanLII 65 (FOREP), 6 R. 67 (H.L.). The latter provides that:

… if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.

Regarding the distance between Jane Street and Scarlett Road, Ms. Owusu submits that:

… it is unprecedented for a decision maker to go at lengths to develop his own evidence and theory in an attempt to find against an individual. The hearing arbitrator’s decision to invent evidence and theory and without giving the appellant an opportunity to respond unquestionably violated the principle adopted from Browne v. Dunn.

In her written submissions, Ms. Sarpong argued that there was an absence of procedural fairness and a serious and fatal procedural irregularity when the Respondent failed to provide notice of fraud and conspiracy, taking her by surprise. Notwithstanding her failure to object, the Arbitrator was limited, as set out in Thambimuthu and ING Insurance Co. of Canada, (FSCO A04-000304, September 30, 2004), to the Respondent’s Response. In oral submissions, however, Ms. Sarpong stated that she was not taken by surprise by the fraud defense advanced at the arbitration hearing.

Regarding Ms Sarpong, the Respondent argues that the issues of fraud and/or conspiracy were

well known by the Appellant. The Respondent submits that if fraud and conspiracy needed to be pleaded, it was not a serious and fatal error and Rule 1.3 of the Code provides that a defect in form or other technical breach will not make a proceeding invalid. Accordingly, the Respondent requests that it now be allowed to amend its Response.

The Respondent argues that the rule in Browne and Dunn was not violated. It submits that Ms. Owusu’s direct examination was completed in thirty minutes, Ms. Sarpong’s in an hour. The Respondent asserts that Ms. Owusu was cross-examined for four hours, specifically regarding the extent of her injuries, her job duties and the distance to her place of work, and Ms. Sarpong was cross-examined for six hours, including her medical evidence.

Regarding the alleged defect in the Response of not alleging fraud, the Appellant’s allegation has been withdrawn. In any event, this submission contradicts the entire main thrust of these appeals that the Appellants were completely unaware of any defense by the Respondent other than its allegation of fraud.

The rule in Browne and Dunn pertains to “an everyday spirit of fairness and decency” of affording a witness an opportunity to explain an apparent contradiction, the breach of the Rule “being relevant to the credibility of both the witness tendering the contradicting evidence and the witness who was not fairly confronted.”³

In this case, the apparent contradiction is not the distance between Jane Street and Scarlett Road but, rather, in the context of whether she was employed at the time of the accident, the time it allegedly took Ms. Owusu to get from her school to her workplace, including walking the distance noted. The Arbitrator, in assessing the Appellant’s credibility, as he was required to do, noted in a balanced manner that while Ms. Owusu knew the necessary bus routes, he found her evidence not impossible, but unlikely. I find no error of law by the Arbitrator.

6. Reasonable Apprehension of Bias

The Appellants’ written submissions state that before the Respondent called its witnesses, the

Arbitrator made it known that the Appellants had an “uphill battle” concerning credibility. The

Appellants argue that this, combined with his “fishing expedition,” show that the Arbitrator had pre-judged both credibility and the merits of the cases and was fixated on negative findings, his mind closed to the Appellants’ evidence. Hence, the Arbitrator’s decision was a fait accompli. Once he formed an opinion in advance that the case would be decided on credibility against the Appellants, “the remainder of the proceeding became useless, his decision became a rubber

stamp and accordingly tainted.”

The Appellants submit that the Arbitrator’s bias was further shown when he states in his

decisions that, upon discussion, the Appellants had agreed that these two proceedings should be heard together. The Appellants submits that there was no such discussion or agreement.

The Appellants cite International Brotherhood of Electric Workers, Local 353 v. Interborough Electric Inc., 2005 CanLII 1690 (On. L.R.B.) that bias exists where there is (a) pre-judgment of the merits (b) pre-judgment of credibility and (c) excessive and one-sided intervention with counsel or examination of a witness. The Appellants cite the definition in Baker v. Canada, 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817, of bias as a reasonable apprehension held by a reasonable and right minded person, applying themselves to the situation and having the requisite information. ⁴

In their oral submissions, however, the Appellants stated that they were not for a moment saying that the Arbitrator was biased, only that he treated them unfairly.

The Respondent submits that the Arbitrator was entitled to review the evidence and make his determinations of fact. It notes the Supreme Court decision in Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, cited in Interborough, that the “record must be considered in its entirety to determine the cumulative effect of any transgressions or improprieties.” The Respondent further cites Liberty Mutual Insurance Company and Persofsky, (FSCO P00-00041, July 3, 2001), that:

The test for reasonable apprehension of bias is based on a well-informed person viewing the matter realistically and practically — and having thought the matter through — and requires that the grounds for the apprehension of bias are substantial, not arising from a “very sensitive or scrupulous conscience.” Committee for Justice and Liberty v. Canada (National Energy Board), 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369.

The Respondent submits that the Arbitrator’s comment regarding the Appellants having an

“uphill battle” regarding credibility was only made after both Appellants’ cases were closed. At the same time, the Arbitrator indicated that the Respondent had an “uphill battle” with respect to the circumstantial evidence it was about to call. The Respondent states that the Appellants specifically agreed at the beginning of the arbitration hearing that these two matters should be heard together, the evidence of one to be applied to the other.

I see no basis that a well-informed person, viewing the matter realistically and practically, would see grounds for an apprehension of bias by the Arbitrator. It is not disputed that the purported comment of the Appellants having an “uphill battle” regarding credibility was made after the Appellants had presented their respective cases. It is thus difficult to see how this comment, taken at its worst, constitutes a pre-judgment of the merits or of credibility. Further, the more general theme of the Appellants’ appeal is a criticism not of excessive intervention by the Arbitrator, but of too little intervention in failing to question the Appellants.

I do not read the Arbitrator’s decisions as an exercise in a “fishing expedition.” Rather, he was complying with his adjudicative duty to provide meaningful reasons to the parties.

The Appellants provide no evidence that the Arbitrator misstated their position at the arbitration hearing itself regarding these proceedings being heard together. In light of the Appellants’ concession that at the beginning of the hearing they withdrew their motions that these matters proceed separately, it is difficult to see a basis for bias or unfairness in the Arbitrator proceeding jointly with these matters, as initially ordered by the pre-hearing arbitrator in her September 13, 2006 pre-hearing letters.

7. Hearsay Evidence

The Appellants submit that a significant part, if not all of the Respondent’s evidence consisted of statements attributed to persons not party to these proceedings and, that specifically for Ms. Owusu, were key to the Respondent’s case. The Arbitrator, it is argued, made a fundamental error of law in relying upon hearsay and circumstantial evidence in assessing credibility, especially when such evidence should not have been allowed and, if allowed, should have been

restricted to the issue of fraud.

The Appellants submit that “hearsay statements may be considered for the truth of their contents

under the exception to the hearsay rule only after an analysis has been followed.” Citing several

criminal cases, the Appellants submit it was incumbent upon the Arbitrator to hold a voir dire on whether to accept such evidence as being reliable. Rather, the Arbitrator “made an impermissible inference and admitted the hearsay evidence on prejudicial basis [rather] than on a probative basis.”

I agree with the Respondent that the Appellants are relying on cases where the liberty of individuals was at stake and the Crown was required to prove its case beyond a reasonable doubt. I further agree, as noted above, that the Appellants themselves relied on hearsay evidence, failing to call as witnesses either Dr. Lo for both Appellants or Dr. Handlesman for Ms. Sarpong.

The SPPA does not prohibit the introduction of hearsay evidence nor does it require a voir dire. In any event, there is no submission from the Appellants that they objected to such evidence or requested a voir dire.

Section 15 of the SPPA states, in part, that a tribunal may admit as evidence at a hearing, whether or not admissible as evidence in a court, any oral testimony and any document or other thing, relevant to the subject-matter of the proceeding and may act on such evidence. This is subject to a prohibition regarding privilege or evidence that is inadmissible by statute, neither of which is applicable here.

As stated by Delegate Naylor in Ahmed and Allstate Insurance Company of Canada, (FSCO P96-00068, June 23, 1998), “[t]he strict rules of evidence do not apply to Commission proceedings. Hearsay evidence is allowed but the considerations of fairness, reliability and relevance underlying the rules should inform an arbitrator’s approach.” Delegate Naylor further stated in Salvaggio and Simcoe & Erie General Insurance Company, (FSCO P97-00062, January 21, 1999) that “[a]rbitrators therefore have a greater latitude than a court (particularly a court in

criminal matters) in dealing with evidence.”

Further, as stated by Director Draper in MacAulay and General Accident Assurance Company of Canada, (FSCO P98-00010, October 13, 1999):

While hearsay is admissible under s.15 of the Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, arbitrators must carefully consider its limitations. Because hearsay evidence cannot be tested on cross-examination, it may be unfair to assume its accuracy — particularly if it is the only evidence on a crucial finding. However, in a system where hearings are to be quicker, more informal, and cheaper than the courts, hearsay evidence is inevitable. There is no fixed rule. Each case must be considered on its particular facts.

I see no basis for rescinding the Arbitrator’s orders on the basis of hearsay evidence.

8. Unreasonable Decision

The Appellants submit that the Arbitrator (1) unreasonably dismissed their claims when there was no evidence that they were not substantially disabled and (2) unreasonably applied the Respondent’s evidence regarding its conspiracy theory in assessing credibility. No properly instructed arbitrator or trier of fact, it is argued, acting judicially could have dismissed these cases.

The Appellants provided no basis in statute or case law for restricting the use of the Respondent’s evidence as argued.

Regarding the Appellants’ first point, as stated above, the onus was on the Appellants to establish both their entitlement to and the quantum of their IRB claims. There is no question, paraphrasing the words of the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, that “there was some evidence upon which [the Arbitrator] could have relied to reach [his] conclusion.” As further stated by the Court, the foundation of the principle that an appellate court must not retry a case and substitute its view for the view of the trial judge is that:

… finality is an important aim of litigation. There is no suggestion that appellate court judges are somehow smarter and thus capable of reaching a better result. Their role is not to write better judgments but to review the reasons in light of the arguments of the parties and the relevant evidence and then to uphold the decision unless a palpable error leading to a wrong result has been made by the trial judge.

The role of the Director and his or her delegate in these internal appeals is further circumscribed

by appeals being limited to questions of law. I see no basis for rescinding the Arbitrator’s

decisions as being unreasonable.

9. Failure to Try the Appellants’ Cases Separately

The Appellants submit that the general rule in a fraud case is that each claimant must be heard separately and the evidence bearing upon one claimant cannot be applied to another. The Appellants argue that the Arbitrator erred in hearing these two matters together. The Appellants further submit that the pre-hearing arbitrator committed a reversible error when she ordered these cases joined together. The Appellants submit that:

However, having fallen into the trap of the erroneous closing argument of the respondent to consider the evidence of … both cases together, the hearing arbitrator would inevitably have concluded that, once he found one applicant is not credible, he could infer from the conspiracy evidence … the other too must be incredible. It is submitted that the rationale for delineating to treat the evidence bearing on separate applicant’s separately has been defeated by his remarks.

The Respondent submits that at the arbitration hearing, the Appellants agreed that these two

proceedings should be heard at the same time with the evidence in one applying to the other and withdrew their motions to have these matters heard separately. Having done so, the Appellants cannot now appeal that to which they agreed.

The pre-hearing arbitrator, over the objections of the Appellants, combined these proceedings, and a third proceeding, pursuant to Rule 30 of the Code as they involved a common motor vehicle accident, the parties were represented by the same counsel and the applicants were insured by the same insurer. Two of the insureds had a common employer and all three had a common family physician and treatment providers.

The pre-hearing arbitrator held that combining these matters, in accordance with the criteria of Rule 30, would result in the most just, quickest and least costly means to deal with these matters, and would avoid the possibility of inconsistent findings. Responding to the insureds’ submission that their privacy would be compromised if the matters were combined, the pre-hearing arbitrator

relied on exceptions to PIPEDA regarding the use of personal information.

Not addressed by the pre-hearing arbitrator in her letter decisions was section 9.1 of the SPPA:

9.1(1) If two or more proceedings before a tribunal involve the same or similar questions of fact, law or policy, the tribunal may,

(a) combine the proceedings or any part of them, with the consent of the parties;

(b) hear the proceedings at the same time, with the consent of the parties;

(c) hear the proceedings one immediately after the other; or

(d) stay one or more of the proceedings until after the determination of another one of them.

The provision continues:

(3) Clauses (1) (a) and (b) do not apply to a proceeding if,

(a) any other Act or regulation that applies to the proceeding requires that it be heard in private;

(b) the tribunal is of the opinion that clause 9 (1) (a) or (b) applies to the proceeding. 1994, c. 27, s. 56 (19); 1997, c. 23, s. 13 (15).

(4) The consent requirements of clauses (1) (a) and (b) do not apply if another Act or a regulation that applies to the proceedings allows the tribunal to combine them or hear them at the same time without the consent of the parties.

(5) If the parties to the second-named proceeding consent, the tribunal may treat evidence that is admitted in a proceeding as if it were also admitted in another proceeding that is heard at the same time under clause (1) (b).

Rule 32 of the SPPA states that “[u]nless it is expressly provided in any other Act that its provisions and regulations, rules or by-laws made under it apply despite anything in this Act, the provisions of this Act prevail over the provisions of such other Act and over regulations, rules or by-laws made under such other Act which conflict therewith.”

Arbitrator Bayefsky, in his pre-hearing decision in Dhir and Non-Marine Underwriters, Mbrs. of Lloyd's (FSCO A98-001394, September 28, 1999), held that notwithstanding the broad rule-making authority of the Director of Arbitrations under section 21 of the Insurance Act, the specifics of section 30 of the Code and his “general common law authority,” he did not have jurisdiction to combine arbitrations without the consent of the parties. Indicating that if he had the authority to do so, for the reasons stated he would have combined the proceedings over Mr. Dhir’s objections, Arbitrator Bayefsky stated:

… I find it advisable that the same arbitrator be assigned to hear both cases and that, to the extent possible, the evidence from one hearing be used in the second hearing, assuming that both cases proceed to arbitration.

In his decisions herein, the Arbitrator did not indicate that he was bound by the pre-hearing arbitrator’s decision to combine these proceedings. Rather, the Arbitrator stated that the pre-hearing arbitrator’s order did not specify how the matters were to be combined. The Arbitrator then specifically states that:

After some discussion with the parties it was agreed that two of the matters [a third arbitration having been withdrawn at the outset of the hearing] would be heard at the same time by the writer with the evidence in one applying to the other, to the extent that it was relevant to the issues in dispute in each arbitration.

It is unclear whether the discussion itself was transcribed. However, the Appellants’ express concession that they withdrew their motions to have these matters heard separately supports the Arbitrator’s statement. There is no evidence contrary to the Arbitrator’s statement. Accordingly, I find no error in law in the Arbitrator’s decision to hear these matters “at the same time … with the evidence in one applying to the other, to the extent that it was relevant to the issues in dispute in each arbitration.”

10. Making Findings Based on Third Party Information

The Appellants submitted that the Respondent obtained third party information in breach of the principles of PIPEDA, information the Arbitrator was prohibited from considering. The Appellants cite the Supreme Court decision in Juman v. Doucette, 2008 SCC 8, [2008] 4 W.W.R. 1, that the adjudicator must determine “what, if any use could be made of the material, having regard to the appellant’s Charter rights and any other relevant considerations.” The Arbitrator failed to do so, and the Appellants were prejudiced by “an unfair, impermissible admission of evidence.”

The Respondent submits that the Appellants served motion records on September 14, 2007 which sought an order barring the use of third party and unauthorized information at the arbitration hearing. However, the Appellants withdrew their motion on the first hearing day. The Appellants agree this occurred. The Respondent further argues that the exceptions in clauses 7(1)(b), 7(2)(d), 7(3)(d)(i) and 7(3)(h.2) of PIPEDA lawfully allow for the collection, use and disclosure of the information in question.

The Respondent argues that, in any event, the Appellants cannot seek an order to bar the use of the information in question as PIPEDA creates its own separate procedure to deal with possible contravention of that legislation and there is no remedy in PIPEDA to exclude evidence.

I note that Juman involved the scope of the “implied undertaking rule,” which is not argued here. However, the following fundamental principle is enunciated in that case:

The public interest in getting at the truth in a civil action outweighs the examinee’s

privacy interest, but the latter is nevertheless entitled to a measure of protection.

I referred the parties to the recent decision of Arbitrator Rogers in Borowski and Aviva Canada Inc., (FSCO A07-002593, September 12, 2008). In that decision, Arbitrator Rogers agreed with the Ontario Superior Court in Ferenczy v. MCI Medical Clinics (2004), 2004 CanLII 12555 (ON SC), 70 O.R. (3rd) 277. In the latter, the Court refused to exclude evidence on the grounds that it was personal information, collected or recorded in violation of the PIPEPA for a number of reasons, most fundamentally:

… the Act does not contain a provision which prohibits the admissibility into evidence of personal information collected or recorded in contravention of the Act. Rather the Act provides that an individual or the Privacy Commissioner may bring a complaint which results in an investigation and report under the Act. Thereafter, certain steps described in the legislation may be taken in the Federal Court. Consequently, if the collection of surveillance evidence in this case is said to be a violation of the Act a complaint may be filed pursuant to the Act to commence that process. However, that has no direct impact on the issue of the admissibility of evidence in this trial.

The evidence at issue here is relevant, in my view, and the probative value of the evidence exceeds its prejudicial effect. By prejudicial effect, I mean the danger that the evidence will be misused … [emphasis added]

The Appellants did not argue that Borowski or Ferenczy were incorrect. Rather, their oral arguments were that the alleged egregiousness of the Respondent in these particular cases dictated that the impugned evidence should not have been allowed into evidence.

It is not clear what precise evidence the Appellants impugn in this regard as the Arbitrator’s decisions, to a very large extent as noted above, were decided on the basis of the Appellants’ own oral testimony given at the arbitration hearing itself. In any event, it is the hearing arbitrator’s discretion whether to allow documentation into evidence. Regarding the judicial exercise of discretion at first instance, the British Columbia Court of Appeal in Pugh v. Pugh, 1979 CanLII 766 (BC CA), 17 B.C.L.R. 14 (C.A.) stated that:

. . . this Court does not have an independent discretion and should only interfere with the exercise of discretion by the trial judge when clearly of the opinion that he acted on a wrong principle, or wrongly exercised his discretion in not giving sufficient weight to relevant considerations, or that, on other grounds, the decision might result in injustice.

I am not persuaded that the Arbitrator, in exercising his discretion, acted on a wrong principle or failed to give sufficient weight to relevant considerations. In part, this is supported by the Appellants own actions in withdrawing their motion objecting to the use of this information. In R. v. David (2002), 2002 CanLII 45049 (ON CA), 61 O.R. (3d) 1, the Ontario Court of Appeal, stated that:

… counsel clearly made a tactical decision not to object to the introduction of

the appellant’s statements. There is no suggestion that his decision was the result of incompetence. Accordingly, in my view, it is not open to the appellant to object to the admissibility of his statements on appeal.

While the failure to maintain an objection perhaps cannot prevail in all circumstances, such as a fatal jurisdictional flaw,⁵ I am not persuaded that such circumstances exist here.

III. CONCLUSION

I am not persuaded that there is any ground advanced by the Appellants upon which to find that the Arbitrator erred in law in coming to his conclusions in these matters. Accordingly, the Arbitrator’s January 17, 2008 decisions are confirmed. The Arbitrator’s May 22, 2008 expense decision was largely determined on the basis of each party’s degree of success in the outcome of

the proceeding. I see no error in law in this regard, and this decision is also confirmed.

IV. EXPENSES

If the parties are unable to agree on entitlement to and/or the quantum of the legal expenses of

these appeals, an expense hearing may be requested within the thirty day time limit set out in Rule 79 of the Code.

If any party has served a Bill of Costs, then the adverse party shall forthwith provide a written

response to the account, identifying the items in dispute and the reasons for the dispute, including any issue as to entitlement. If a party seeking its legal expenses has not yet served a Bill of Costs describing the expenses claimed, services received and costs, it shall do so forthwith.

February 2, 2009

Lawrence Blackman 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. 2D.M. Paciocco and L. Stuesser. The Law of Evidence, 4th ed. Toronto: Irwin Law, 2005.
3. 3D. Finley, The Rule in Browne v. Dunn: “If only you’d asked me …,” Toronto, Continuing Legal Education, Law Society of Upper Canada, 2002.
4. 4taken from Grandpré J., writing in dissent, in Committee for Justice and Liberty v. National Energy Board, 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369, at p. 394.
5. 5R. v. Dwyer and Lauzon, 1978 CanLII 60 (On. C.A.).