Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 10

FSCO A08-002144

BETWEEN:

AMMA ADUAKO Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA Insurer

DECISION ON A MOTION

Before: Arbitrator Suesan Alves

Heard: By written submissions received by January 20, 2010.

Appearances: Murray Tkatch for Ms. Aduako David Murray for Personal Insurance Company of Canada

Issues:

The Applicant, Amma Aduako, was injured in a motor vehicle accident on September 22, 2006. She applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended, claiming various statutory accident benefits from Personal Insurance Company of Canada (“the Personal”), payable under the Schedule¹. The Personal disputes Ms. Aduako’s entitlement to all of the benefits she claims and seeks a repayment of benefits.

The Personal brought a motion to adjourn the arbitration hearing. The Applicant opposed the adjournment.

The issues in this hearing are:

Should this hearing be adjourned?

Result:

This hearing should be adjourned because of the Applicant’s default in providing agreed upon productions. The remaining grounds raised by the Insurer are dismissed.

EVIDENCE AND ANALYSIS:

Adjournment request

Counsel for the Insurer sought an adjournment of the hearing scheduled to commence on February 8, 2010. Counsel for the Applicant opposed the adjournment.

Counsel for the Applicant submitted that once a hearing date has been set, the bases on which an arbitrator can grant an adjournment are limited to those enumerated in Practice Note 9 of the Dispute Resolution Practice Code—Fourth Edition, Updated October 2003, (“the Code”), namely: emergency situations including serious illness or deaths; imminent settlement; or medical or other critical evidence that is unavoidably delayed.

I disagree with this submission. Rule 3.2 of the Code states that “Practice Notes are designed to guide users in the dispute resolution process at the Commission. However, they are not binding and do not affect the duty of the adjudicator to make decisions based on the circumstances and merits of each case.” In my view, it would be an error of law to fetter my discretion by refusing to consider other circumstances when raised by either party to the proceeding. I will now consider the grounds raised in this case.

Grounds for the adjournment

The Insurer’s request was based on three grounds: a desire to bring a motion to stay the arbitration hearing and only a related court action proceed; what were described as “practical reasons;” and the Applicant’s non-compliance with her production obligations. For the reasons which follow, I reject the first two grounds and grant the adjournment based on the third ground.

1. The insurer intends to seek a stay of the arbitration

Before she applied for arbitration in October 2008, Ms. Aduako commenced a tort action, which the Personal is defending. The Personal paid Ms. Aduako some accident benefits. However, it now alleges that the accident of September 22, 2006 was staged. The Personal raised the issue of whether there had been an accident at the arbitration pre-hearing. Apparently, the Personal has also raised that issue in the court proceeding. The Insurer submits that proceeding on the same issue in two fora creates the risk of inconsistent verdicts.

From the Applicant’s point of view there is no merit to the Insurer’s allegation of a staged accident. Counsel for the Applicant characterizes the Insurer’s withholding of further benefits and its claim that the accident could not have occurred as “high handed and unreasonable” and claims a special award. The Applicant also disputes that the issues she has raised in the tort proceeding and in the arbitration proceeding are the same.

It would appear that other than raise the issue as to whether the accident was staged, the Insurer has done nothing to pursue a determination of that question in either forum. The tort action was first in time, however, discoveries have not been held. They are presently scheduled for July 26, 2010.

According to the pre-hearing report, “The Applicant agreed to consider whether the discrete issue of whether there was an accident should be decided by the courts in the companion tort action. The parties may also wish to consider whether the arbitration proceeding should be stayed pending the outcome of the tort action, to avoid a multiplicity of proceedings and potentially inconsistent findings.”

In my view, it is incumbent on the party raising such an issue or issues to do something more than just raise it. Failing agreement by counsel for the Applicant, the Insurer should have moved promptly to seek a resumption of the pre-hearing and arrange for a determination of the issues, rather than letting the matter drift. The pre-hearing was held in April 2009. At that time hearing dates were scheduled on February 8, 9, 10 and 11, 2010. I agree with the submission of counsel for the Applicant that there was nothing to prevent counsel for the Insurer from requesting a determination of the question of whether the Applicant was involved in an accident within the meaning of the Schedule by an arbitrator at the Financial Services Commission of Ontario.

Counsel for the Applicant also submitted that this tribunal’s obligation was to provide an expeditious and efficient process and that an adjournment of the hearing would cause the Applicant to suffer “an unnecessary anxiety of delay.”

Despite the importance of the principle of avoiding inconsistent verdicts, due to the Insurer’s delay, I am not prepared to grant an adjournment of the hearing, approximately nine months after the pre-hearing and a month before the arbitration hearing is scheduled to commence. This would delay the Applicant’s entitlement to an adjudication of her remedy.

2. “Practical reasons”

Counsel for the Insurer proposes that the tort and accident benefits issues be determined in the Applicant’s tort proceeding. He submits that since the Applicant’s tort action is subject to mandatory mediation. “The insurer believes that there is a reasonable possibility of a resolution of all of these claims if done together.”

The Applicant did not respond to this ground, however, I did not find this submission persuasive, particularly in light of the Insurer’s position that there was no accident and its claim in this proceeding for repayment of more than $40,000 in accident benefits.

3. The Applicant’s outstanding productions

Counsel for the Insurer submitted that at the pre-hearing, the Applicant agreed to produce the documents requested in the Insurer’s response. Some 17 productions are listed in the Insurer’s response. He further submitted that as of the date of the Insurer’s submissions, none of the documents have been produced. I note that on January 15, 2010, during the period that submissions were filed in relation to this motion, counsel for the Applicant filed the clinical notes and records of one of the Applicant’s health practitioners.

Although asked to respond to each of the grounds raised by the Insurer, counsel for the Applicant neither disputed nor responded to the allegation that the Applicant failed to comply with her production obligations.

Parties are afforded limited documentary discovery in an arbitration proceeding. The pre-hearing was held in April 2009. I infer from the pre-hearing report that productions were canvassed fully at that time. According to the pre-hearing report there was agreement on most productions; orders made with respect to disputed items; and counsel undertook to “comply with the undertakings given (or provide proof of best efforts to comply, in the case of documents not in a party’s possession, control, or power) within 60 days of this pre-hearing.” Thus, by June 2009, counsel for the Insurer would have been aware that counsel for the Applicant had not provided the agreed upon productions.

In the pre-hearing report, parties are asked to arrange pre-hearing resumptions to deal with any production issues well before the hearing date. Yet, counsel for the Insurer waited until January 2010, to raise the Applicant’s non-compliance with undertakings, approximately seven months after the default ought to have been apparent.

Despite that delay, in the absence of any response from counsel for the Applicant or explanation for the alleged non-compliance, I agree with counsel for the Insurer that it would be unfair to the Insurer to allow the Applicant to proceed to a hearing when she has not complied with her production obligations. For that reason I grant the adjournment and vacate the hearing dates of February 8, 9, 10 and 11, 2010.

In the circumstances the parties should return to a resumption of the pre-hearing. The pre-hearing arbitrator provided counsel with available dates. Counsel for both parties were asked to advise of their availability in the event the requested adjournment was granted. Counsel for the Insurer provided dates; counsel for the Applicant did not.

In these circumstances I have selected the earliest date available to counsel for the Insurer for the resumption, namely January 29, 2010 at 2:00 p.m. via teleconference call.

January 22, 2010

Suesan Alves Arbitrator

Date

Financial Services Commission of Ontario