Mubashir Riaz v. State Farm Mutual Automobile Insurance Company, 2009 ONFSCDRS 120

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 120

FSCO A08-002294

BETWEEN:

MUBASHIR RIAZ

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before: Arbitrator Suesan Alves

Heard: By telephone conference call on September 4, 2009.

Appearances: Nick Greer for Mr. Riaz

Doug Patton for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mubashir Riaz, was injured in a motor vehicle accident on November 9, 2005. He applied for arbitration claiming weekly income replacement benefits, attendant care benefits, housekeeping and home maintenance benefits, and interest payable under the Schedule¹ and expenses under the Insurance Act, R.S.O. 1990, c.I.8, as amended. State Farm Mutual Automobile Insurance Company (“State Farm”), disputed his entitlement to these benefits and claimed its expenses.

State Farm seeks a stay of the arbitration on this motion. Counsel for the Applicant does not oppose the requested stay.

The issue on this motion is:

Should this arbitration be stayed?

Result:

The arbitration will be stayed unless Mr. Riaz or his lawyer writes to counsel for State Farm and to the Case Administrator at the Financial Services Commission of Ontario, by September 30, 2009, informs them that he objects to a stay of the arbitration, and that he undertakes to proceed diligently with this arbitration. If he fails to do so, an Order staying the arbitration will be issued and the hearing dates of March 1, 2, 3 and 4, 2010 will be vacated.

EVIDENCE AND ANALYSIS:

On this motion counsel for the Insurer seeks a stay of the arbitration. He submits that Mr. Riaz has not participated in the process and has no ability to proceed with the arbitration. Counsel for the Applicant does not oppose the request.

The background to the request for a stay is as follows:

Mr. Riaz was injured in a motor vehicle accident on November 9, 2005. He was a cyclist who was struck by a truck which was insured by State Farm. At the time of the accident, Mr. Riaz was aged 18 years and six months, and was working at two jobs: as a produce clerk and as a pizza helper who helped to bake pizzas.

State Farm commenced payment of his income replacement benefits from one week following the accident. About two months later, counsel for the Applicant informed State Farm that his client returned to work in January 2006. State Farm requested a Declaration of Post-accident Income on February 1, 2006. Mr. Riaz did not respond and State Farm suspended his income replacement benefits as of March 23, 2006 pursuant to section 33 of the Schedule.

State Farm asked Mr. Riaz to provide information to assist it in determining whether there was another insurer with a higher priority than State Farm, which was responsible for payment of his statutory accident benefits on two occasions. Mr. Riaz did not respond to State Farm’s requests of December 22, 2005 or of February 17, 2006.

Counsel for the Applicant advised that he had experienced difficulty reaching the Applicant before and after the arbitration proceeding was commenced. His assistant attempted to reach the Applicant on July 8, 2008 and left a message. On July 23, 2008, she tried reaching him at a new contact number that he provided and left a message for him to contact the office. Mr. Greer spoke with Mr. Riaz on July 25, 2008 and received alternate contact numbers.

Mr. Riaz applied for arbitration on October 28, 2008. The arbitration application was signed only by his counsel. The first pre-hearing was scheduled to be held on April 22, 2009.

About a month before the pre-hearing, counsel for State Farm wrote to counsel for Mr. Riaz and requested production of the records of one of Mr. Riaz’s physicians; the files of any other doctors or other treatment providers; Mr. Riaz’s employment file, including salary information and the identification of any other forms of employment, with associated employment files, from the date of the accident forward. At the pre-hearing, counsel for the Applicant agreed that these documents were relevant and ought to be produced; however, he advised that his client had lost touch with his office and he needed him to sign the authorizations. Counsel for the Applicant advised that he would make further attempts to reach Mr. Riaz, failing which he would seek to be removed from the record.

The day after the pre-hearing, on April 23, 2009, the assistant of counsel for the Applicant attempted to contact Mr. Riaz at his alternate number without success. The same day, counsel for the Applicant wrote to Mr. Riaz asking him to contact his office to update his contact information, failing which he would have no choice but to close his file. He advised that he received no response from Mr. Riaz.

On May 27, 2009, the assistant of counsel for the Applicant attempted to reach Mr. Riaz at his contact number and was informed by a recording that the number was no longer in service.

At the resumed pre-hearing discussion on July 3, 2009, counsel agreed to a further resumption of the pre-hearing on September 4, 2009. Counsel for the Applicant advised that he intended to bring a motion to be removed from the record. Counsel for the Insurer advised that he would seek his client’s instructions with respect to seeking a stay of the arbitration.

Counsel for the Insurer wrote to Mr. Riaz on July 28, 2009, advising that he intended to seek a stay of the arbitration. That letter was retuned to his office marked “Moved/Unknown.”

As of July 10, 2009, no mail addressed to the Applicant by the Financial Services Commission of Ontario appears to have been returned to the Commission’s offices.

ANALYSIS & FINDINGS

Counsel for the Insurer seeks a stay on the basis that the Applicant has not participated in the process and has no ability to proceed with the arbitration. Counsel for the Applicant does not oppose the request.

I find there is little prospect that the Applicant will prosecute this case. It appears that Mr. Riaz’s last contact with his lawyer was over a year ago. Mr. Riaz’s lack of participation in the arbitration process has meant that his counsel cannot obtain and produce relevant medical and employment documentation which the Insurer has requested. This puts the Insurer in the position of being unable to know the case it has to meet. One pre-hearing and two resumptions of the pre-hearing have been held. More than a year has elapsed since the first pre-hearing and there has been no progress with respect to productions. There is little prospect that these documents will be forthcoming. I do not believe that the Insurer should continue to be put to the expense of responding to this arbitration application.

I find that I have the authority to grant a stay of the arbitration by virtue of section 25.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended, as part of the “general discretion of this tribunal to control its own processes in the context of the overall objectives of the system ... These include adequate disclosure...” ² I find I should exercise my discretion to grant the requested stay in the circumstances of this case to balance the rights of both parties.

The Dispute Resolution Practice Code—Fourth Edition, Updated October 2003 (the “Code”) is silent as to the practice and procedure to be followed in relation to the granting of a stay of an arbitration proceeding. A review of the arbitral jurisprudence indicates that in most cases, stays are made which take immediate effect and are granted where the applicant has actual notice of the stay application.

In the circumstances of this case, where it has not proved possible to provide the Applicant with actual notice of the stay application, I prefer to use a two-stage process similar to that contemplated by Rule 68 of the Code, when an arbitrator is asked to dismiss a proceeding without a hearing because the proceeding is frivolous, vexatious or commenced in bad faith.³

That two-stage process contemplates that the adjudicator will deliver written notice to all parties of his or her intention to dismiss the proceeding, and allows any party who objects to the dismissal to respond by setting out their objections and submissions in writing to the other parties and to the adjudicator. The adjudicator considers any objections and submissions and may then make an order on such terms as he or she considers just.

The Insurer is not seeking a dismissal in this case, but a stay, which is a less severe remedy. By using a similar process to that set out in Rule 68 of the Code, I do not intend to suggest that this proceeding is frivolous, vexatious or commenced in bad faith.

For these reasons, this decision is written notice to Mr. Riaz, given at the last address he has provided to the Commission, that unless he or his lawyer writes to counsel for State Farm and to the Case Administrator at the Financial Services Commission of Ontario by September 30, 2009, informs them that he objects to a stay of this arbitration, and that he undertakes to proceed diligently with this arbitration, an Order staying the arbitration will be issued and the hearing dates of March 1, 2, 3 and 4, 2010 will be vacated.

September 9, 2009

Suesan Alves

Arbitrator

Date