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

Neutral Citation: 2011 ONFSCDRS 111

FSCO A09-002315

BETWEEN:

JOSEPH DENIS LUKACSI

Applicant

and

INTACT INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Susan Sapin

Heard: October 9, 2011, at the offices of the Financial Services Commission of Ontario in Toronto

Appearances: Mr. Lukacsi represented himself Asher Honickman for Intact Insurance Company

Issues:

The Applicant, Joseph Denis Lukacsi, a self-employed producer, was injured when he was rear-ended by a motor vehicle while riding his bicycle on September 23, 2007. He applied for a statutory income replacement benefit (“IRB”) and attendant care and housekeeping benefits from Intact Insurance Company (“Intact”), payable under the Schedule.¹ Intact did not pay these benefits because it alleged Mr. Lukacsi failed to provide information to support his claims, despite numerous requests, and failed to comply with his obligations under sections 32, 33 and 50, among others, of the Schedule. The parties were unable to resolve their disputes through mediation, and Mr. Lukacsi applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The substantive issues in dispute are Mr. Lukacsi’s entitlement to the following under the Schedule:

1. IRBs from September 30, 2007 and ongoing, under section 4;

2. Amount of IRB under section 6;

3. Attendant care benefits of $3,000 per month from September 23, 2007 to September 2, 2009 under section 16;

4. Housekeeping and home maintenance expenses of $100 per week from September 23, 2007 to September 22, 2009 under section 22;

5. A special award under subsection 282(10) of the Insurance Act, because Intact unreasonably withheld or denied payments to Mr. Lukacsi;

6. Interest on overdue benefits owing under subsection 46(2).

In addition, each party claims its expenses of the arbitration proceeding.

The Hearing:

Mr. Lukacsi arrived at the hearing unrepresented and unprepared, without documents or witnesses to prove his case. He stated he attended the hearing “just to find out what’s going on.” He further stated “I am ready for it [his case] to be thrown out. I want to leave this country.” He made several more contradictory statements, for example: he wanted to represent himself; he did not want to proceed without a lawyer; he wanted to get a lawyer; he did not want a lawyer; he had so many problems with lawyers he was “done with them;” his repeated (and well‑documented) failure to produce documents was the fault of his lawyers, and not his, as they never passed on to Intact the tax documents he gave them. He was so distrustful of lawyers, in fact, that he had taken to recording his conversations with them.

Eventually, Mr. Lukacsi requested an adjournment. I denied this request as he presented no credible excuse to support it and the record indicates the matter has languished due to his well‑documented and longstanding failure to provide key information to support his claims or to otherwise move the matter forward since the Application for Arbitration was filed on September 9, 2009, more than two years ago. I note that Mr. Lukacsi has already been granted numerous adjournments to either obtain new counsel – he has had no less than five legal representatives with whom he has parted ways since he first submitted his Application for Accident Benefits to Intact – or to produce documents. Mr. Lukacsi attended the hearing without a representative and without the required documents. His excuse - that the fault is his lawyers’ and not his - I find doubtful given the history of this matter² and his presentation at the hearing.

I was not persuaded that yet another adjournment would remedy any of these difficulties or assist in moving the matter forward. At the same time, though, Mr. Lukacsi was clearly not in a position to proceed. To require him to would likely have led to a protracted and unfocussed hearing. Circumstances being what they were, I heard a motion from Intact to dismiss the proceedings without a hearing on the grounds that due to Mr. Lukacsi’s longstanding non-compliance with the Schedule and with his obligations to pursue his claims in a meaningful way, he had no hope of proving entitlement to any of the benefits he claims and it would be a waste of Intact’s and the Commission’s time to proceed – in other words, the proceeding was vexatious.

My subsequent review of Intact’s case brief, filed as Exhibit 1, and the record of these proceedings since Mr. Lukacsi filed his Application for Arbitration, indicates to me that Mr. Lukacsi’s inaction and longstanding lack of cooperation have indeed been vexatious. His presentation and lack of any type of preparation at all for the hearing did nothing to dispel this view. I find his apparent inability to take seriously his obligations to pursue his claim comes very close to being an abuse of the Commission’s process.

However, although sections 4 and 23(1) of the Statutory Powers Procedure Act³ and Rule 68 of the Dispute Resolution Practice Code (the “DRPC”)⁴ grant me the authority to make such orders or give such directions in proceedings before me as I consider proper to prevent abuses of process, which can include dismissing a proceeding without a hearing, I find it would be premature to do so at this time. Dismissal of an arbitration proceeding is a serious consequence which extinguishes a claimant’s rights.

From my review of Exhibit 1 and Intact’s Response to Mr. Lukacsi’s arbitration application, I accept that Mr. Lukacsi was involved in an accident and sustained injuries, and that Intact has refused to pay IRBs, housekeeping and attendant care benefits on two different grounds: one, Mr. Lukacsi’s failure to comply with section 33 of the Schedule which requires him to provide information, and in a timely manner, for Intact to determine his entitlement to benefits, as well as a statutory declaration; and two, the lack of evidence to establish, on a balance of probabilities, that he meets the statutory tests for entitlement to each of the benefits he claims.

Regarding the failure to provide information, the penalty imposed by subsection 33(2) is the suspension of benefits for any period during which Mr. Lukacsi fails to provide the information reasonably required. However, if he is otherwise entitled to benefits because he meets the statutory entitlement tests, and he has a reasonable explanation for his delay in complying with requests for information, then Intact would be required to pay benefits withheld during the period of non-compliance.

I find Mr. Lukacsi has been aware of Intact’s concerns and his obligations since at least two months after the accident. For example, Intact’s response to his belated claim for housekeeping expenses sets out, in clear and unmistakeable terms, the particular provisions of the Schedule regarding information that is required from the insured person, the applicable time limits, and the consequences of non-compliance:

We are not funding the above expenses. Please be reminded that you were held in non-compliance 3 times on December 31, 2007, February 6, 2008 and March 3, 2008 for not submitting your Statutory Declaration required under section 33 of the Statutory Accident Benefits Schedule. In relation to the periods of September 24, 2007 to December 30, 2007 – You have not complied with the timeframe under section 32 of the Statutory Accident Benefits Schedule for submission of these expenses. As you had representation during that period you will need to provide us with a reasonable explanation as to why you are submitting your expenses for the benefit late in accordance with section 31 of the Statutory Accident Benefits Schedule. This reasonable explanation is also being required under section 33 of the Statutory Accident Benefits Schedule and is due by January 29, 2009.⁵

Failure to provide required information in a timely manner is a concern that applies equally to Mr. Lukacsi’s claims for IRBs and attendant care expenses. Intact alleges it provided Mr. Lukacsi with a Form 1 (which requires an assessment) to be completed in support of a claim for attendant care expenses, but Mr. Lukacsi never returned the form and did not submit any expenses. Regarding the IRB claim, Intact maintains Mr. Lukacsi did not provide to its accountants all of the information they specifically required to calculate an IRB.⁶

I find, at the very least, Mr. Lukacsi should have the opportunity to explain, under oath at a hearing, why he did not comply with sections 32 and 33. Furthermore, given that Exhibit 1 contains tax returns, invoices, bank statements and what appear to be operating expenses, I find Intact should explain where this information is deficient and why it was not possible to calculate an IRB.

With respect to meeting the statutory tests for entitlement to the benefits claimed, I note that Intact’s Exhibit brief raises some genuine issues for hearing. One example is a Disability Certificate dated November 13, 2007 from a chiropractor, Dr. Mark Gonneau, stating that Mr. Lukacsi was substantially disabled from his heavier housekeeping tasks. Despite this, Mr. Lukacsi did not submit any claims for housekeeping until December 31, 2008, more than a year later, for $6,100 in retroactive benefits. Why the expenses were submitted so late, or how Intact responded to the Disability Certificate, are not apparent from the materials filed and require explanation.

On balance, I find that the arbitration should not be dismissed without a hearing. I find that Mr. Lukacsi should have an opportunity to present his case as best he can. A new hearing date will be scheduled. However, given the conduct of this matter to date, I am setting strict terms.

Failure to comply with any one of the terms outlined below will result in dismissal of the case without a hearing under Rule 68 of the DRPC on the grounds that this proceeding is vexatious and an abuse of the Commission’s process. This decision serves as notice to Mr. Lukacsi, under Rule 68.2, of a potential dismissal of his case on these grounds.

Terms:

1. The arbitration hearing will be scheduled for two days, no later than 120 days after the date of this decision;

2. Within 30 days of this decision, Mr. Lukacsi will contact counsel for Intact to schedule a mutually convenient date for the arbitration proceeding, to take place within the time frame above, and advise the Commission of the date;

3. Mr. Lukacsi shall produce to Intact, 45 days prior to the commencement of the arbitration hearing, a list of the witnesses he intends to call and copies of all documents on which he intends to rely at the hearing;

4. The new hearing date will be peremptory to Mr. Lukacsi. He may represent himself, or be represented, but no further adjournment will be granted to obtain a legal representative or to obtain documents.

5. If Mr. Lukacsi succeeds in finding a legal representative, he will advise Intact and the Commission of the name and contact information for that person as soon as the representative is retained.

6. Any disputes arising between now and the hearing will be dealt with by the pre-hearing arbitrator, Arbitrator Feldman.

EXPENSES:

Any expenses arising out of the parties’ attendance to date will be dealt with in the course of the rescheduled hearing.

December 5, 2011

Susan Sapin Arbitrator

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

Neutral Citation: 2011 ONFSCDRS 111

FSCO A09-002315

BETWEEN:

JOSEPH DENIS LUKACSI

Applicant

and

INTACT INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The arbitration hearing will be scheduled for two days, no later than 120 days after the date of this decision;

2. Within 30 days of this decision, Mr. Lukacsi will contact counsel for Intact to schedule a mutually convenient date for the arbitration proceeding, to take place within the time frame above, and advise the Commission of the date;

3. Mr. Lukacsi shall produce to Intact, 45 days prior to the commencement of the arbitration hearing, a list of the witnesses he intends to call and copies of all documents on which he intends to rely at the hearing;

4. The new hearing date will be peremptory to Mr. Lukacsi. He may represent himself, or be represented, but no further adjournment will be granted to obtain a legal representative or to obtain documents.

5. If Mr. Lukacsi succeeds in finding a legal representative, he will advise Intact and the Commission of the name and contact information for that person as soon as the representative is retained.

6. Any disputes arising between now and the hearing will be dealt with by the pre-hearing arbitrator, Arbitrator Feldman.

7. If Mr. Lukacsi fails to comply with any of the terms of this order or fails to attend the rescheduled arbitration hearing, Intact may bring a motion to dismiss the proceedings without a hearing pursuant to Rule 68 of the Dispute Resolution Practice Code and this Order will serve as good and sufficient notice to Mr. Lukacsi of this potential outcome.

December 5, 2011

Susan Sapin Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2The record of proceedings at the Commission before me include: the Report of Mediator, Application for Arbitration, Response by Insurer to an Application for Arbitration, Pre-hearing letters, formal notices of proceedings, requests for adjournments, correspondence between the Commission and the parties, and Intact’s document brief filed at the hearing as Exhibit 1.
3. 3R.S.O. 1990, c. S.22, s.23 (1)
4. 4As indicated in Arbitrator Feldman’s pre-hearing letter to the parties, the Code, Schedule and other pertinent legislation and material are available to the public through the FSCO website: www.fsco.ca.
5. 5Explanation of Benefits (OCF-9) dated January 8, 2009, Exhibit 1, tab 10, p 28.
6. 6I note that Intact considers the period of non-compliance to be from December 31, 2007 to April 22, 2009.