Denise Gonsalves v. Certas Direct Insurance Company, 2011 ONFSCDRS 12

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

Neutral Citation: 2011 ONFSCDRS 12

Appeal P09-00036

OFFICE OF THE DIRECTOR OF ARBITRATIONS

DENISE GONSALVES Appellant

and

CERTAS DIRECT INSURANCE COMPANY Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Amin Sachedina for the Appellant, Mrs. Denise Gonsalves Mr. Todd J. McCarthy for Respondent, Certas Direct Insurance Company

HEARING DATE: September 14, 2010 submissions received subsequent to the July 6, 2010 oral hearing

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 The Arbitrator’s October 9, 2009 decision is rescinded, the stay of the arbitration is lifted and the matter is returned to arbitration to set a new hearing date.

2. If the parties are unable to agree on the legal expenses of this appeal, an expense hearing shall be requested within thirty days of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as submissions regarding entitlement to and/or the quantum of such expenses.

January 24, 2011

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND AND NATURE OF THE APPEAL

The Appellant, Mrs. Denise Gonsalves, was injured in a motor vehicle accident on August 25, 2005, suffering significant injuries, including fractures that required surgery. As a result of her injuries, the Appellant applied to her first-party automobile insurer, the Respondent, Certas Direct Insurance Company, for statutory accident benefits available under the Schedule.¹

Mediation failed to resolve entitlement disputes between the parties and the Appellant applied for arbitration in June 2008. The October 30, 2008 pre-hearing letter identified the main substantive issue as the Appellant’s claim to non-earner benefits (“NEBs”) under section 12 of the Schedule. A four-day arbitration hearing was scheduled to start September 21, 2009. In the interim, a preliminary issue hearing was scheduled for December 15, 2008 to determine whether insurer medical examinations (“IMEs”) sought by the Respondent under section 42 of the Schedule were reasonably required. Arbitrator Ashby’s December 30, 2008 decision allowed the motion, in part, staying the arbitration to allow a psychiatric, but not an orthopaedic IME.

Arbitrator Ashby found that the Respondent’s NEB refusal rested on an October 3, 2005 Disability Certificate of the Appellant’s treating orthopod, Dr. Ford, that stated, without further explanation, that the Appellant did not suffer a substantial inability to carry on a normal life. The Respondent did not seek to have the Appellant reassessed by Dr. Ford but rather now wished to obtain a new orthopaedic opinion to respond to documentation upon which the Appellant relied, being, Dr. F. Langer’s October 23, 2006 report, Dr. D.J. Ogilvy-Harris’ December 7, 2007 report and a February 23, 2008 disability certificate from her family doctor, Dr. T. Ponnampalam.

Arbitrator Ashby found no evidence the Appellant’s orthopaedic symptoms presented a new diagnosis, a change in her condition or a change in the medical investigation that reasonably necessitated an orthopaedic IME.

The Appellant attended the psychiatric IME in March 2009. In August 2009, the Appellant’s new counsel requested that the arbitration hearing proceed the next month, as had been scheduled at the October 29, 2008 pre-hearing discussion, stating that in this respect “[n]either side will be prejudiced in any manner whatsoever.” On August 19, 2009, on consent, Arbitrator Ashby lifted the stay. Within the next two days, the Appellant served the Respondent further reports of Drs. Ogilvie-Harris and Langer dated August 17, 2009 and August 18, 2009 respectively.

The Respondent wrote Arbitrator Ashby on September 11, 2009 seeking a stay and an adjournment of the September 21, 2009 hearing, renewing its prior motion for an orthopaedic IME. The Respondent’s September 16, 2009 letter noted the case administrator’s telephone call that morning that the Respondent’s submissions would be considered by the hearing arbitrator on September 21, 2009.

The September 21, 2009 arbitration hearing was assigned to Arbitrator Muzzi (the “Arbitrator”). Before addressing the merits of the case, the Arbitrator heard the Respondent’s request that the hearing be adjourned and the proceeding stayed. The Arbitrator’s October 9, 2009 decision confirmed her oral decision that it was reasonably necessary that the Appellant attend the requested orthopaedic IME. The arbitration was stayed pending such attendance.

The Arbitrator held that the matter was not res judicata as subsection 42(2) of the Schedule allows IMEs as are reasonably necessary. Thus, an IME dispute could arise more than once in a proceeding and the arbitral jurisprudence, in determining whether an IME request is reasonably necessary, considers new circumstances that have arisen, including a new diagnosis,. Further, arbitrators have broad discretion to preserve the integrity of the adjudicative process. Ensuring a fair process or an adequate hearing might require that an IME proceed even after arbitration commences and notwithstanding an insurer’s mixed motivations in making its request.

In December 2008 Arbitrator Ashby had not found any new orthopaedic circumstances or that an orthopaedic IME was necessary for an adequate hearing. However, the Arbitrator found there were new circumstances, namely the further reports of Drs. Langer and Ogilvie-Harris that suggested a new diagnosis or change in the Appellant’s condition from what they had found two years before. The Arbitrator further found that the Respondent had brought its IME request, in the circumstances, in as timely a manner as possible.

The Arbitrator concluded that as the Appellant had not yet undergone an orthopaedic IME the Respondent’s ongoing right and obligation to assess the claim outweighed the Appellant’s right to privacy and being spared a further intrusive examination. Taking into account the objective factors and the circumstances of the case, the Arbitrator found it would be unfair to proceed with the arbitration, as scheduled, without allowing an orthopaedic IME.

The Appellant’s November 6, 2009 Notice of Appeal sought leave to appeal the Arbitrator’s October 9, 2009 decision on a preliminary issue, asking that the Arbitrator’s order be set aside, the stay lifted, a new arbitration be scheduled at the earliest possible date and the Respondent not be allowed to introduce documents it failed to disclose within the requisite time limits under the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003) (the “Code”).

Following written and oral submissions, my April 16, 2010 letter decision addressed Rule 50.2 of the Code that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless the Director (or, by virtue of subsection 6(4) of the Insurance Act, the Director's Delegate) orders otherwise.

Weighing the criteria in Allstate Insurance Company of Canada and Tesfay, (FSCO P99-00023, June 21, 1999),² I was persuaded to exercise my discretion to accept this appeal from a preliminary or interim arbitration decision.

As conceded by the Appellant, allowing the appeal would not necessarily lead to the most expeditious result. However, I was persuaded that this appeal raised novel, substantive and broadly important legal issues, including the ramifications of State Farm Mutual Automobile Insurance Company v. Ramalingam, 2009 CanLII 44115 (ON S.C.D.C.), leave to the Court of Appeal for Ontario refused (M37986, March 9, 2010).

Specifically important was the consideration of Rule 39 of the Code. The latter provides that all documents, assessments and reports are to be filed at least thirty days before the first day of a hearing, subject to exceptional circumstances. In issue was whether a “new diagnosis, a change in the claimant's condition or a new direction in medical investigation” simpliciter was sufficient at the start of an arbitration hearing to order a stay to allow for an IME, or were extraordinary circumstances, critical evidence unavoidably delayed or some other higher threshold required for such an order at that stage of the proceeding.

I now turn to the respective grounds of appeal.

II. ANALYSIS

(a) Res Judicata

The Appellant cites Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248, that the requirements of issue-estoppel are that (a) the same question has been decided, (b) the judicial decision which is said to have created the estoppel was final, and (c) the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised, or their privies.

The Appellant also cites Diamond v. Western Realty Co., [1924] CarswellOnt 116 (S.C.C.), that where a definite decision upon a definite point of law is given in an interlocutory proceeding and no appeal is taken, the matter becomes res judicata so as not to be reviewable except in special circumstances. The Appellant submits that the orthopaedic IME issue decided by Arbitrator Ashby was res judicata and there were no special circumstances.

The Respondent submits that the Arbitrator was not res judicata, given the new medical reports that were not before Arbitrator Ashby nine months before and which were not anticipated when the motion was heard before her. To decide that this matter was res judicata would encourage non-disclosure of information and reports by a party in order to secure an unfair advantage at a later date.

Subsection 42(1) of the Schedule allows insurers, “for the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit under this Regulation,” to require an insured person to be examined by one or more persons allowed by the provision “as often as is reasonably necessary.”

I agree with the Arbitrator that the result of subsection 42(1) is that disputes regarding IME attendances may arise more than once in the adjusting of a file. I am not persuaded that Arbitrator Ashby’s December 30, 2008 decision was a final decision regarding all further IME issues, orthopaedic or otherwise, at any time in the future. The remedy for a motion brought on essentially the same facts would be an expense award under subsection 282(10) of the Insurance Act and/or a special award under subsection 282(10), the latter if there was an adjudicative finding that the insurer had unreasonably withheld or delayed payments.

Accordingly, I am not persuaded by this ground of appeal.

(b) Exercise of Discretion

The Appellant submits that the Arbitrator erred in exercising her discretion to adjourn the arbitration hearing and order the stay, as follows:

(i) concluding that the Appellant’s updated orthopaedic reports contained new evidence or suggested a change in the Appellant’s condition;

(ii) in any event, finding that a new diagnosis, a change in the Appellant’s condition or a new direction in the medical investigation was sufficient to order a stay on the eve of or at the start of an arbitration hearing;

(iii) taking into consideration irrelevant factors and failing to consider relevant factors; and,

(iv) adjourning the arbitration the day the hearing was to begin, contrary to prior case law that this is trial brinkmanship;

The Appellant cites Hock (Next Friend of) v. Hospital for Sick Children (1998) O.A.C. 321, that errors of law include unreasonable inferences from the evidence and the failure to consider essential evidence. The Appellant submits that the Arbitrator had no evidence for finding that the updated reports suggested a new diagnosis, a change in condition or any new circumstances subsequent to Arbitrator Ashby’s December 2008 decision, and that the Arbitrator failed to identify what exactly the new diagnosis or the change in circumstances were.

The Appellant submits that the only change in her condition alleged by the Respondent was her improvement. The Appellant cites Arbitrator Feldman’s decision in Carpenter and Farmers’ Mutual Insurance Company, (FSCO A07-001980, July 31, 2008), on the question of whether a stay should be ordered pending an IME attendance:

There is nothing new in Mr. Carpenter’s complaints of chronic pain. The only “change” in his condition is allegedly an improvement. Since Farmers’ has never paid anything towards non-earner benefits and has always denied that Mr. Carpenter qualifies for such benefits, the assessment in question cannot be sought for the purposes of evaluating whether he is still entitled to non-earner benefits. The only reasonable conclusion one can draw is that its purpose would be to gather further evidence to use at the hearing to justify Farmers’ decision to deny him these benefits for the last three-and-a-half years. [emphasis in the original]

The Appellant argues that all that was new in her additional medical reports were the specialists’ opinions on NEB entitlement, and that an orthopaedic opinion unfavourable to the Respondent does not constitute new information. In any event, opinions on the NEB eligibility test had been previously provided by Dr. Ford and by Dr. Ponnampalam. The Appellant submits that this case differs from Belair Insurance Company Inc. and F.S., (FSCO P96-00039, June 11, 1996) where the basis of the claim had changed, and from Ramalingam where a new entitlement test had arisen for which the insurer had not conducted an IME.

The Appellant notes that the Code does not directly address IME requests that require adjourning a hearing. However, Rule 1.2 of the Code provides that when something is not specifically provided for in the Rules, the practice may be decided by referring to similar Rules in the Code.

Rule 39.2 provides that only in extraordinary circumstances may a party seek permission to serve a document, report or assessment less than 30 days before the start of a hearing. While Ramalingam and State Farm Mutual Automobile Insurance Company, (FSCO P05-00026, August 13, 2007) includes new information as a criterion whether an IME is reasonable, another criterion is the timing of the request and whether the hearing will have to be adjourned.

Citing Singarajah and Wawanesa Mutual Insurance Company, (FSCO A02-000785, June 16, 2003), the Appellant argues that extraordinary means “unusual” or “not typical.” Practice Note 9 of the Code allows adjournments where medical or other critical evidence is unavoidably delayed, but does not sanction adjournments where early arrangements for further medical assessments or follow up have not been made. The Appellant submits that the exceptional or extraordinary circumstances required by Rule 39.2 and Practice Note 9 of the Code to grant an adjournment did not exist in this case.

The Appellant notes that in Singarajah, a report containing the first reference to specific disabilities was held not to be new information where this had been a live issue of which the insurer had ample notice, but where the insurer took no steps to arrange timely IMEs. The Appellant argues that NEBs was not a new issue that came as a surprise to the Respondent when the arbitration was commenced in June 2008.

Rather, the Respondent had denied NEBs on November 23, 2005. Subsequently, in her January 2, 2007 IME report, Ms. R. Shirazi, O.T., had recommended to the Respondent that it conduct an orthopaedic IME if it wished to rebut Dr. Langer’s October 2006 opinion as to the Appellant’s housekeeping disability. In February 2008, Dr. Ponnampalam, with supporting reasons, had stated that the Appellant suffered from a complete inability to carry on a normal life, the latter phrase being a criterion for NEB entitlement.

The Appellant further submits that the Arbitrator’s allegedly unsubstantiated and erroneous conclusions were based on irrelevant considerations, including the Appellant’s change of solicitors and filing updated medical reports after the Respondent agreed to lift the stay.

The Appellant also argues that the Arbitrator failed to consider relevant factors such as the Respondent waiting 21 days after receiving the updated reports to bring its most recent IME motion, having not sought an orthopaedic IME for some three years before the pre-hearing.

The Appellant submits that the Arbitrator further failed to consider the IME criterion in Ramalingam as to whether the insurer had accepted the claim and continued to pay benefits. The Appellant submits that in this case the Respondent had refused the NEB claim throughout, being content to deny such benefits from 2005 based on Dr. Ford simply ticking off a box on a form. This differed from Ramalingam where the insurer had paid income replacement benefits to the 104 week mark.

The Respondent, the Appellant submits, neither contacted nor requested an update from Dr. Ford, notwithstanding an insurer’s obligation to reassess a claim, on a timely basis, on receiving new information. Having waited until the October 2008 pre-hearing to seek an orthopaedic IME, the Appellant submits the Respondent does not come with clean hands, but rather simply seeks to bolster its earlier decision to deny NEBs. The Appellant argues that an insurer should not be allowed to defend the reasonableness of its denial of benefits after the fact by obtaining last minute IME opinions.

The Respondent submits that the Arbitrator had wide discretion to control the arbitration to ensure a fair hearing both under the Code and the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended (the “SPPA”). The Arbitrator, it argues, exercised her discretion correctly and reasonably, having regard to the evidence, namely, new reports that were not before Arbitrator Ashby nine months earlier, and that the Arbitrator applied the appropriate legal principles set out in Belair and in Ramalingam.

The Respondent submits that Ramalingam and Belair set out the general principles of the Insurance Act, and that neither the SPPA nor the Code can hamstring an arbitrator. The Respondent submits that Ramalingam is binding and that it provides that section 42 includes the general power of an arbitrator to allow for a fair hearing and avoid trial by ambush. The Respondent submits that Rule 39 of the Code is not fair.

The Respondent further submits that this appeal does not raise a question of law, as required by subsection 283(1) of the Insurance Act, and there is no basis for interference at the appellate level. The Respondent, therefore, asks that the appeal be dismissed with costs.

The Respondent agrees that a FSCO adjudicator has no power, such as under section 105 of the Courts of Justice Act, R.S.O. 1990, c. C.43, to directly order an insured person to attend an IME. The Respondent thus requests that the stay remain, given the Appellant’s failure to attend an October 2009 IME with Dr. Lloyd. However, the Respondent has no objection to the Appellant resuming the pre-hearing discussion to comply with her requisite attendance.

Delegate Naylor, in Peterson and Royal Insurance Company of Canada, (OIC P-006241, February 6, 1996), stated that “an adjournment is a matter of discretion, not of right” and that “the exercise of an arbitrator's discretion is not to be interfered with on appeal unless it is clearly wrong or there is substantial reason for doing so.”³ The Divisional Court noted the same, in Ramalingam, that:

The Director’s Delegate also stated that the decision to order an IE is a discretionary one, and that she should not interfere unless the arbitrator’s decision was clearly wrong or there was a substantial reason for intervening.

The essence of this appeal is an adjournment request made at the start of an arbitration hearing. Rule 72 and Practice Note 9 of the Code specifically address adjournments. There are also rules in the Code that specifically address the parties’ obligations prior to an arbitration hearing, including Rule 39 that pertains to the service and admission of evidence.

These provisions of the Code were not addressed by the Arbitrator in her October 9, 2009 decision. This does raise a question of whether there was an error of law and whether there is a substantial reason for intervening in the Arbitrator’s exercise of discretion in this case.

This dispute resolution system is intended to be a quicker, simpler and more streamlined alternative to the Courts. In addressing IME requests during a FSCO proceeding, the Divisional Court stated in Ramalingam that:

The decision under review was also made within the context of a specialized adjudicative regime for resolving disputes between claimants and insurance companies with respect to SABS. An appeal to the Director from the decision of an arbitrator lies only on a question of law. The question before the Director’s Delegate involved the interpretation of s. 42 of the Schedule, as well as the propriety of the arbitrators’ exercise of discretion refusing to adjourn the arbitration hearing in order to permit further IEs. Therefore, deference should be given to the Director’s Delegate’s decision.

In the earlier Divisional Court decision in Worthman v. Assessed Inc., 2006 CanLII 7038 (ON SCDC), [2006] O.J. No. 925, Power J. stated that:

In Campeau v. Liberty Mutual Insurance Co. (FSCO A00-000522) (Ontario Insurance Commission) Arbitrator, Lawrence Blackman had this to say about SABS:

IME (independent medical examinations) and DAC (Designated Assessment Centre) examinations are not defence medical examinations. They do not arise because the physical or mental condition of an adverse party in an existing legal proceeding is in question. They are legislatively mandated as part of a statutory scheme of first-party contractual rights and obligations, to clarify, as part of the normal adjusting process, whether an applicant has met the applicable entitlement requirements.

I find these comments to be instructive.

Arbitrator Naylor, in Scott and Toronto Transit Commission (Markel Insurance), (OIC A-001116, September 4, 1992), held that IMEs provide insurers “with an effective opportunity to fairly assess the applicant's medical condition, on an independent basis.” Again, Power J., in Worthman, stated that:

Arbitrator Blackman, in Campeau, supra, referred to the Ontario Court of Appeal’s decision in General Accident Assurance Co. v. Chrusz et al. 1999 CanLII 7320 (ON C.A.), (1999), 45 O.R. (3d) 321. There, the court held that the appropriate test for privilege is the “dominant purpose” test, and that the onus is on the party asserting the privilege (or immunity) to establish the evidentiary basis for the privilege. Mr. Blackman said, “If the dominant purpose of an IME or DAC examination is litigation, actual or contemplated, then the statutory provisions are being abused. As stated by Arbitrator Allen in Swanson and Wellington Insurance Company (FSCO A98-000067, May 26, 1998), the purpose of section 65 [the equivalent, under the prior Schedule, to section 42] is to adjust an applicant’s claim, not to acquire medical evidence to bolster an insurer’s case for the arbitration hearing.” I adopt this reasoning.

The Divisional Court in Ramalingam did not reference Worthman. The Respondent submits that Worthman dealt with IMEs in a context completely different than that which concerned the Arbitrator and that Ramlingam has confirmed that one of the dual purposes of section 42 is to ensure litigation fairness. However, the Divisional Court in Ramalingam stated, at paragraph 36:

In the present case, however, the issue is not the application of the rules of natural justice; rather, it is the scope of the insurer’s right to obtain independent medical examinations. That right is governed by s. 42 of the Schedule, which provides, in s. 42(3), that the insurer may require examinations as often as is “reasonably necessary”. There is no absolute right to an independent examination, and the determination by an adjudicator that the insurer is not, in the particular circumstances, entitled to such an examination can not be equated to a denial of natural justice.

The Divisional Court reiterated, at paragraph 45, that “[a] finding that an IE was not reasonably necessary and refusal to order one does not engage a question of natural justice.” In dismissing the application for judicial review, the Court found that the Delegate’s refusal to interfere with the arbitrator’s decisions not to order IMEs “fell within a range of reasonable outcomes.” Thus, the Court stated that it need not deal with the issue of the adjudicative remedy.

Regarding whether the arbitrators had interpreted section 42 too narrowly when they held that section 42 only applied when the insurer adjusts claims, the Court in Ramalingam did find that:

In her reasons [the Director’s Delegate] set out the correct interpretation of s. 42(1) of the Schedule, and rejected the interpretation of the two arbitrators. She stated that “nothing in the SABS requires an insurer to prove an ongoing arbitration proceeding is irrelevant to its request for an insurer examination” (Reasons, p. 11).

The Court noted in the specific context of the hearing arbitrator’s IME decision in Ramalingam that it “was a reasonable exercise of discretion for the arbitrator, in the interests of fairness to both parties, to refuse first, the request for adjournment and second, the motion for a stay in the midst of the cross-examination.”

Updated medical reports may be served closer to the start of an arbitration hearing, subject to the thirty-day rule in Rule 39.1 of the Code. These reports will invariably include updated information regarding further medical attendances, complaints, findings on examination and treatment provided, especially when there are ongoing claims for housekeeping, medical/rehabilitation or weekly disability benefits, the onus of proof being on the insured person. The reports may also provide expert opinions properly within the author’s area of expertise.

In an alternative dispute system that does not provide examinations for discovery, such reports avoid surprise by furnishing the other party with relevant information in advance of the hearing. The filing of such reports can also assist an adjudicator while avoiding the unnecessary expense of calling the authors to give oral evidence. Such evidence can also assist to resolve a dispute.

In this case, the Respondent’s sense is that it was misled into agreeing to lift the prior stay imposed by Arbitrator Ashby. This earlier stay was, however, predicated solely on the Appellant attending the psychiatric IME, which the Appellant did.

Nonetheless, the Appellant’s August 17, 2009 letter to Arbitrator Ashby stated that neither party would be prejudiced if the arbitration were to proceed as scheduled, advising that both parties had exchanged documents and the lists of reports to be used. The letter does not reference the further reports of Dr. Langer or Dr. Ogilvie-Harris as having been received or being anticipated. Given that these reports are contemporaneously dated and address specific legal questions more usually raised by lawyers, it is difficult to believe otherwise than that these reports were, nonetheless, in the contemplation of the Appellant when she sent her August 17^th letter.

There are legitimate concerns of unfairness where an insurer is completely taken by surprise by critically new information, without any reasonable means of responding. It is fundamental to protect the integrity of the dispute resolution process against trial brinkmanship. It is also fundamental to protect the integrity of the Schedule and the adjusting process. Such integrity is not enhanced by sanctioning an insurer’s failure to request, on a timely basis, the IMEs to which it was reasonably entitled under the Schedule to properly investigate the basis of a claim of which it was previously aware until an arbitration is commenced and the matter is scheduled for a hearing.

I am not persuaded that the Divisional Court has created in section 42 of the Schedule what the Legislature has declined to do, namely the equivalent of defence medicals under section 105 of the Courts of Justice Act. Nor am I persuaded that the Divisional Court has reduced the threshold for IMEs requested on the eve of an arbitration hearing to any new diagnosis, any change in the claimant’s condition or any new direction in the medical investigation. Such an approach would invariably allow adjournments for any updated information provided by an insured and discourage the filing of any updated medical reports served in accordance with the Code.

An adjudicator has various available remedies under the Code and the SPPA, in weighing the relevant criteria as to whether an IME is reasonable, to protect the integrity of both the adjudicative process and the Schedule. Subsection 23(1) of the SPPA provides that a “tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.” This may include not allowing into evidence part of an expert report where to do so would result in an abuse. An abuse may include opinion evidence that is beyond the expertise of the author.

Applicable in this specific case, in addressing the Respondent’s adjournment and stay requests, were Practice Note 9 and Rules 39 and 72 of the Code. The Arbitrator did not consider these provisions.

I do not accept the Respondent’s submission that Rule 39 is unfair, or that it conflicts with Ramalingam. Rather, Rule 39 preserves the integrity of the adjudicative process by endeavouring to balance efficiency and fairness, providing at that late date in a proceeding (thirty days before the start of the hearing) that a higher threshold of extraordinary circumstances is required for the service of new documents.

Practice Note 9 specifically states that common circumstances in which adjournments are refused include circumstances where the parties have not made early arrangements for further medical examinations, assessments or follow-up. The same Practice Note states that adjournments will be granted where critical evidence is unavoidably delayed.

Hence, the Respondent’s motion required an adjudicative consideration not merely as to what occurred over the five weeks prior to the hearing, but also in the adjusting history of the matter since the motor vehicle accident. In this case, orthopaedic expert opinion regarding NEBs had been provided by Dr. Ford in October 2005, upon which Arbitrator Ashby found the Respondent was content to rely in denying NEBs until the pre-hearing process some three years later.

Respectfully, I am persuaded that the Arbitrator erred in law in not applying the appropriate criteria to the Respondent’s adjournment request. There is no consideration or finding of extraordinary circumstances or of unavoidable delay.

The Arbitrator states that the new reports provided by the Appellant suggest a new condition or diagnosis, but she is not clear as to what that new condition or diagnosis is. The significance of the updated reports, and what appeared to have been of concern to the Respondent, is that the further reports now provide, for the first time from these medical practitioners, their respective opinions on the ultimate legal issue to be determined by the Arbitrator. The Respondent’s September 11, 2009 letter states that “Dr. Langer for the first time gives the opinion that the applicant meets the complete inability test under Section 12.”

In his August 18, 2009 report, Dr. Langer specifically states that:

… it is my view that Ms. Gonsalves suffers a complete inability to carry on a normal life as a result of the accident for it has resulted in an impairment that continuously prevents her from engaging in substantially all the activities in which the person ordinarily engaged in before the accident.

Dr. Ogilvie-Harris, in his August 17, 2009 report, states that “[i]n my opinion, [the Appellant] does suffer from a complete inability to carry on a normal life, as a result of the accident.”

An expert’s role in litigation is to provide independent assistance to the adjudicator by way of objective unbiased opinion within his or her expertise, uninfluenced by the exigencies of litigation. Rule 4.1.01 of the Rules of Civil Procedure now limits experts in the court system, in part, “to provide opinion evidence that is related only to matters that are within the expert’s area of expertise.” This Rule is consistent with R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9, that a trial not be allowed to degenerate to a contest of experts. The Supreme Court held in Mohan that:

… As stated by Lawton L.J. in R. v. Turner, [1975] Q.B. 834, at p. 841, and approved by Lord Wilberforce in Director of Public Prosecutions v. Jordan, [1977] A.C. 699, at p. 718:

An expert's opinion is admissible to furnish the court with scientific information which is likely to be outside the experience and knowledge of a judge or jury …

There is also a concern inherent in the application of this criterion that experts not be permitted to usurp the functions of the trier of fact. Too liberal an approach could result in a trial’s becoming nothing more than a contest of experts with the trier of fact acting as referee in deciding which expert to accept.

These concerns were the basis of the rule which excluded expert evidence in respect of the ultimate issue. Although the rule is no longer of general application, the concerns underlying it remain. In light of these concerns, the criteria of relevance and necessity are applied strictly, on occasion, to exclude expert evidence as to an ultimate issue …

The Arbitrator, herself, questioned, at page 57 of the transcript, the presence of “dueling experts.”

The Respondent agrees that a Commission adjudicator has no authority to order an insured to attend an IME, as stated by Arbitrator Manji in Granic v. Allstate Insurance Company of Canada, (OIC A-006615, January 30, 1995).

Rather than contemplating limiting the allowed scope of opinion evidence from both parties’ experts to areas within their medical expertise, based on both physical and paper review, including Dr. Ogilvie-Harris’ updated notation of cervical and lumbar improvements, the Arbitrator’s decision essentially allowed the parties equal opportunity to usurp her function in determining the ultimate question of law, while concurrently delaying the proceeding.

I am not persuaded that ensuring that the medical practitioners being relied on by both sides provide updated opinions on the ultimate legal test before the adjudicator are the extraordinary circumstances contemplated by Rule 39.2 or the critical evidence contemplated by Practice Note 9.

Accordingly, I find that there is substantial reason for intervening in the Arbitrator’s exercise of discretion. Accordingly, I find that the Arbitrator’s decision to stay the matter should be rescinded and the matter remitted to arbitration for a new hearing date.

(c) Bias

The Appellant does not argue actual bias but the reasonable apprehension of bias.

Relying, in part, on R. v. Bow Street Stipendiary Magistrate, [2000] 1 A.C. 119 (H.L.), the Appellant submits that the influential nature of a professional association with a presumed witness gives rise to a legitimate apprehension of arbitral bias. The Appellant argues that the failure to disclose that alleged conflict of interest while hearing the adjournment and stay request means that the decision cannot stand.

Although an adjudicator may, with justification, believe that he or she is unbiased, if the appearance of bias is present, it is argued that the adjudicator must withdraw from the case.

The Respondent submits that the Arbitrator acted properly in subsequently disclosing to counsel her concerns in this regard and recusing herself from the proceeding when the Appellant objected to her continued involvement in this matter. The Arbitrator, it is argued, was essentially hearing a pre-hearing motion, when she was not yet the hearing arbitrator, and no evidence regarding the substantive issues had yet been heard. The alleged conflict of interest was not relevant to the question of whether to proceed. It would only become relevant if the Arbitrator indeed decided to proceed.

I do not agree that the Arbitrator, in rendering her decision, was simply acting as a pre-hearing arbitrator. The Respondent acknowledged at the arbitration, specifically at page 43 of the transcript, that the Arbitrator was the hearing arbitrator. Same was indicated in the Respondent’s pre-hearing letter of September 16, 2009. September 21, 2009 was set as the beginning of a four-day hearing on the substantive issues. Had the Arbitrator declined the Respondent’s motion at the beginning of the arbitration, she was to proceed with the hearing.

The question, as set out in R. v. Bow Street Stipendiary Magistrate, is whether there are:

… circumstances so affecting a person acting in a judicial capacity as to be calculated to create in the mind of a reasonable man a suspicion of that person’s impartiality, those circumstances are themselves sufficient to disqualify although in fact no bias exists.

In Webb v. The Queen, 181 C.L.R. 41, 74, cited in R. v. Bow Street Stipendiary Magistrate, the Court held that one category of bias is:

… disqualification by association. It will often overlap the first [disqualification by interest] and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons.

I am persuaded that, if the Arbitrator had proceeded to hear the matter, a reasonable person would have a suspicion regarding impartiality notwithstanding the absence of any actual bias. Accordingly, it was entirely proper and necessary for the Arbitrator to have raised her concern with the parties before proceeding with the substance of this arbitration and entirely proper of her to recuse herself upon objection by a party.

It would have been preferable had the Arbitrator raised this concern immediately when the individual’s name was first noted, and receive submissions whether she should proceed with the hearing if she denied the adjournment and stay request. However, I am not persuaded that her failure to do so in the context of this case would raise in the mind of a reasonable person a suspicion of her impartiality regarding the specific preliminary procedural issue before her.

III. EXPENSES

If the parties are unable to agree on the legal expenses of this appeal, pursuant to Rule 79.2 of the Code an expense hearing shall be requested within thirty days of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, services received and the costs, as well as submissions regarding entitlement to and/or the quantum of such expenses.

January 24, 2011

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. 2The criteria are: (a) the apparent strength of the appeal; (b) the importance or novelty of the issue raised; and, (c) whether the appeal would provide the quickest, most just and most expeditious way of disposing of the issues between the parties, in accordance with Rule 1.1 of the Code.
3. 3The decision was reaffirmed in Glynn and General Accident Assurance Company, (OIC P96-00085, March 17, 1997). The decision was also followed by Delegate Makepeace in State Farm Mutual Automobile Insurance Company and Ramalingam, (FSCO P05-00026, August 13, 2007), upheld in State Farm Mutual Automobile Insurance Company v. Ramalingam, 2009, leave to the Court of Appeal for Ontario refused.