Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 148

FSCO A09-001407

BETWEEN:

REGURAMAR RAMAKRISHNAN

Applicant

and

PRIMMUM INSURANCE CO.

Insurer

Before: Arbitrator John Wilson

Heard: October 29, 2009, in at the offices of the Financial Services Commission of Ontario in Toronto, Ontario.

Appearances: Nancy Ng for Mr. Ramakrishnan Petros Yannakis for Primmum Insurance Co.

Issues:

The Applicant, Reguramar Ramakrishnan, was injured in a motor vehicle accident on March 20, 2008. He applied for and received statutory accident benefits from Primmum Insurance Co. (“Primmum”), payable under the Schedule.¹

The parties were unable to resolve their disputes through mediation, and Mr. Ramakrishnan applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the pre-hearing discussion of this case held on October 29, 2009, it was clear that Mr. Ramakrishnan had been somewhat slow in providing detailed information about his claim to Primmum, his insurer.

Although counsel for Mr. Ramakrishnan had provided releases for the provision of certain documentary evidence, such releases were only provided a few days prior to the actual pre-hearing, with the result that the documents, including the notes and records of his treating physician, were not available to either side at the pre-hearing.

Likewise, very few particulars have been provided by Mr. Ramakrishnan of the nature and circumstances of his claim. His application for arbitration consisted of the absolute minimum: the appropriate boxes checked with some information as to quantum added.

The issues are:

Is Mr. Ramakrishnan required to answer the questions referred to him by Primmum at the pre-hearing of this matter?

Result:

Mr. Ramakrishnan is required to answer the questions referred to him by Primmum at the pre-hearing of this matter.

EVIDENCE AND ANALYSIS:

At the pre-hearing, counsel for the Insurer asked permission to request answers on certain questions, which he felt to be relevant to this arbitration. Given the immediate response of Ms. Ng, counsel for the Applicant, I asked that the Insurer provide the questions in writing, and that Mr. Ramakrishnan be given some time to discuss with his counsel whether he would respond to the questions and, if so, to determine what the answers would be.

I should note that in this arbitration the primary issues are caregiver services, attendant care and some medical benefits.

The proposed questions were:

Have you returned to work since the date of loss?
What does your attendant care provider assist you with?
Prior to the accident, what caregiving assistance did you provide to your daughter?
Does your wife work or go to school?
Have you been attending treatment? When was the last time you went to treatment?

Ms. Ng provided her client’s response to question #1. She declined to provide further information as to question #2 since she alleges that the details are already provided in the invoices, and the question is really a challenge to the credibility of her client. The same answer was given as to question #3. Question #4 was deemed to be not relevant, and no answer was given. An answer was given to both parts of question #5.

Ms. Ng, as noted, refused to have her client answer three questions. She elaborated her position by stating that had the Insurer required such information, it could have requested a statement under oath. Now, in her opinion, it was too late to do so, and the questions would now have to wait until the hearing (provided, of course, that her client was put on the stand).

Primmum was not satisfied with Mr. Ramakrishnan’s response to the questions. Nor did it accept that it was now barred from requiring an examination under oath.

There is no question that the questions asked are relevant to the issues in arbitration.

The legislative scheme which creates this statutory accident benefit scheme mandates the provision of information by an insured that the insurer requires to assist it in determining an entitlement to benefits. Section 33(1) of the Schedule provides as follows:

(1) A person applying for a benefit under this Regulation shall, within 10 business days after receiving a request from the insurer, provide the insurer with the following:

Any information reasonably required to assist the insurer in determining the person’s entitlement to a benefit.

A statutory declaration as to the circumstances that gave rise to the application for a benefit.

The number, street and municipality where the person ordinarily resides.

Proof of the person’s identity.

At the pre-hearing in this matter, Primmum advised that it required the information noted in questions #1 to #5 listed at the outset of this decision in order to consider resolution of Mr. Ramakrishnan’s claim.

The disclosure principle enunciated in section 33 is consistent with the common law duty that arises between an insurer and insured under the doctrine of uberimae fideis or utmost trust.

The governing principle is applicable to all contracts and dealings. Good faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact and his believing the contrary. But either party may be innocently silent, as to grounds open to both, to exercise their judgment upon.

Although Lord Mansfield² first identified this aspect of insurance in the context of the initial underwriting of an insurance policy, it has since come to describe the ongoing relationship between an insured and an insurer in all stages of the contract, from underwriting to the negotiation of any claim.

The relationship between an insurer and an insured is contractual in nature. The contract is one of utmost good faith. In addition to the express provisions in the policy and the statutorily mandated conditions, there is an implied obligation in every insurance contract that the insurer will deal with claims from its insured in good faith:

As there are two parties to any contractual relationship, the duty of good faith is mutual. Just as an insurer must deal openly and fairly with its insured, so an insured must do the same in the context of any claim under a policy of insurance. Such fairness includes not “concealing what he privately knows” where that knowledge may be relevant to the claim. Indeed, E.M. Stewart J. observed in Aviva v. Balvers:

If the purpose of the swift payment of no-fault benefits under the Schedule is to be furthered, I consider that fairly full disclosure by a claimant must be made if benefits are to be assessed and received.³

While there are no examinations for discovery in arbitration, the obligation on parties to provide relevant information is not restricted to documentary production. As has been noted by Arbitrator Rotter, and re-affirmed many times since, “both sides have a duty to communicate with each other openly and in good faith.”⁴ Such communication is an ongoing process that continues throughout arbitration.

I find, therefore, that there is an ongoing obligation on behalf of an insured to share relevant information as a claim progresses, an obligation that would include answering supplementary questions aimed at particularizing the claim advanced by an insured.

Power of an arbitrator to order factual disclosure:

Section 22(1) of the Insurance Act provides as follows:

Proceedings before Director or arbitrator

For the purpose of exercising the powers and performing their duties under this Act, the Director and every arbitrator has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Superior Court of Justice for the trial of civil actions. [emphasis added]

As a result of this provision, an arbitrator, once appointed to a matter, is endowed with all the powers vested in a judge of the Superior Court, with regard to compelling the appearance of witnesses and the production of documents, records and things.

The Oxford Canadian Dictionary defines “vested” as:

adj. 1 in senses of vest v. 2 absolute, fixed; not contingent. 3 established by law or tradition. [Emphasis added]

The use of the word “vested” incorporates, by reference, the powers of the judiciary arising from both the common law and statute, whether the Courts of Justice Act or the relevant sections of the Rules of Civil Procedure.

Although the Dispute Resolution Practice Code (the “Code”) does not provide specifically for oral discoveries, or affidavits of documents in the arbitration process, it provides both general guidance and significant leeway to arbitrators in crafting procedural solutions that may be necessary to do justice between the parties.

In addition, the Courts of Justice Act and the Rules of Civil Procedure vest powers in judges of the Superior Court that permit them to order parties and even non-parties to submit to examinations for discovery.

Such powers are part of the judiciary’s powers to “enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Superior Court of Justice for the trial of civil actions” as that phrase is used in section 22(1) of the Insurance Act.

Although there is a general power provided by section 22(1) of the Act to allow arbitrators to order parties to provide information in any manner that could be ordered by a superior court judge, admittedly there is no specific provision in the Code that sets out the manner in which such an order might be made, nor one specifically setting out the procedures for discoveries or discovery-like proceedings.

When faced with a lacuna in the Code, an arbitrator is in a position to use his or her discretion to craft a procedural direction that is appropriate to the case at hand. In doing so, the discretion should be exercised fairly in the spirit of the balance of the Code. One of the first considerations should be Rule 1.1 which reads as follows:

1.1 These Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.

1.2 Where something is not specifically provided for in these Rules, the practice may be decided by referring to similar Rules in this Code.

The Code makes it clear, however, that the parties to an arbitration have a general obligation to each other and to the tribunal to disclose relevant evidence in their hands to the opposite side prior to a hearing and, in Rule 32.3, specifically accords that power to arbitrators.

Subject to Rule 39, an arbitrator may at any time order the production of documents or the giving of information that he or she considers relevant to the determination of the issues in the arbitration, on such terms as he or she considers appropriate.

Arbitrators are then given a further, and, indeed, separate grounding for ordering both documentary and oral production where required, in addition to section 22(1) of the Insurance Act.

Section 12(1) of the Statutory Powers Procedure Act also grants an extensive power to tribunals, including arbitrators, to order the production of relevant evidence in matters before them.

In effect, the rule as to productions at the Commission is that everything that is relevant and probative and not subject to privilege is producible. Likewise, information that is relevant should also be producible.

Rule 32.3 of the Code specifically provides for this situation in allowing an arbitrator to order “the giving of information that he or she considers relevant to the determination of the issues in the arbitration.”

Notwithstanding the absence of a specific procedure to allow for such provision of relevant information, both the Code and section 22(1) of the Insurance Act recognize that an arbitrator has the necessary discretion to craft an appropriate procedure to facilitate the “giving of information that he or she considers relevant to the determination of the issues in the arbitration.”

I find, therefore, that it is within my power, and consistent with the goals of the accident benefit scheme, to require Mr. Ramakrishnan to answer the questions posed by the Insurer.

Examination Under Oath

Mr. Ramakrishnan raised the issue of whether the Insurer should have, instead of asking the questions in the context of a pre-hearing discussion, required Mr. Ramakrishnan to attend an examination under oath instead.

Section 33(1.1) of the Schedule provides for examinations under oath:

If requested by the insurer, a person who applies for a benefit under this Regulation as a result of an accident shall submit to an examination under oath, but is not required to,

(a) submit to more than one examination under oath in respect of matters relating to the same accident; or

(b) submit to an examination under oath during a period when the person is incapable of being examined under oath because of his or her physical, mental or psychological condition. O. Reg. 281/03, s. 12 (1).

(1.2) A person is entitled to be represented at his or her own expense at the examination under oath by such counsel or other representative of his or her choice as the law otherwise permits. O. Reg. 281/03, s. 12 (1).

(1.3) The insurer shall make reasonable efforts to schedule the examination under oath for a time and location that are convenient for the person and shall give the person reasonable advance notice of the following:

The date and location of the examination.

That the person is entitled to be represented in the manner described in subsection (1.2).

The reason or reasons for the examination.

That the scope of the examination will be limited to matters that are relevant to the person’s entitlement to benefits. O. Reg. 281/03, s. 12 (1).

I do not believe that there is any reading of the above provision or, indeed, related jurisprudence that would suggest that an examination under oath pursuant to section 33 of the Schedule is the only way in which an insurer may gather information from an insured. Indeed, the balance of section 33 of the Schedule suggests the contrary.

Certainly ordering an unnecessary examination under oath would offend the basic principle that arbitration should seek quickest and least expensive resolution of the dispute.

Nor is there any wording in section 33(1.1) which would suggest a temporal restriction on any request for such a request. Indeed, E.M. Stewart J. found quite the contrary stating clearly:

The only limit placed by the Schedule’s provision upon the examination under oath is that its scope is limited to “matters that are relevant to the person’s entitlement to benefits under this Regulation”.

E.M. Stewart J. continued:

Although it is apparent that the Schedule restricts an insurer to the entitlement to conduct only one examination under oath of a complainant in respect of matters relating to the same accident, that entitlement is not forfeited by reason of the fact that the insurer may choose to exercise its right to examine for discovery the same claimant in a civil action brought against it by the claimant.⁵

Consequently, there is no value to Mr. Ramakrishnan’s suggestion that, once arbitration has been commenced, the Insurer’s option to request an examination under oath is lost.

While an examination under oath may still be available to the Insurer in this matter, the questions to be answered by Mr. Ramakrishnan are not equivalent to such an examination in any case. Rather, the questions are a request for information pursuant to both section 33(1)1 of the Schedule and the common law duty of the parties to the insurance contract to communicate with each other openly and in good faith.

Conclusion

Having found that an arbitrator has the power to order a party to disclose relevant facts and information in the context of a pre-hearing, and having found that the information requested by Primmum appears to be relevant to Mr. Ramakrishnan’s claim for accident benefits, I find no reason to exempt him from his disclosure requirements. Consequently Mr. Ramakrishnan shall provide Primmum with complete written answers to questions #2, #3 and #4 by November 12, 2009, at the latest

EXPENSES:

No expenses having been requested by either side. I leave that issue for determination by the hearing arbitrator.

November 3, 2009

John Wilson Arbitrator

Date