Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2011 ONFSCDRS 40

Appeal P11-00002 and P11-00002C

ECONOMICAL MUTUAL INSURANCE COMPANY Appellant/Cross-Respondent

and

DHANRAJ JAGGERNAUTH Respondent/Cross-Appellant

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Ms. Helen D. K. Friedman for the Cross-Respondent/Appellant Economical Mutual Insurance Company Ms. Kelley Campbell for the Cross-Appellant/Respondent, Dhanraj Jaggernauth

HEARING DATE: April 11, 2011 (oral decision rendered April 11, 2010)

PRELIMINARY APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Pursuant to subsection 283(3) of the Insurance Act, R.S.O. 1990, c. I.8, and Rule 52.2 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010), the time for Dhanraj Jaggernauth to deliver his Notice of Cross-Appeal is extended to the receipt date of March 24, 2011, on the following conditions:
As orally confirmed on April 11, 2011, Mr. Jaggernauth shall, by April 15, 2011, pay the requisite application fee for an appeal order of $250.
The Notices of Appeal and Cross-Appeal herein are combined.
Economical Mutual Insurance Company is not required to deliver a Response to Appeal to the Cross-Appeal.
Economical Mutual Insurance Company shall, by May 2, 2011, at 4:45 p.m., serve on Mr. Jaggernauth and file with the Financial Services Commission of Ontario (with a Statement of Service in Form F) its written submissions regarding its Appeal.

Financial Services Commission of Ontario Economical and Jaggernauth Appeal Order P11-00002 and P11-00002C

Mr. Jaggernauth shall, by May 2, 2011, at 4:45 p.m., serve on Economical Mutual Insurance Company and file with the Financial Services Commission of Ontario (with a Statement of Service in Form F) his written submissions regarding his Cross-Appeal.
Economical Mutual Insurance Company shall, pursuant to Rule 54.3 of the Code, by May 24, 2011, at 4:45 p.m., serve on Mr. Jaggernauth and file with the Financial Services Commission of Ontario (with a Statement of Service in Form F) its written submissions regarding the Cross-Appeal.
Mr. Jaggernauth shall, by May 24, 2011, at 4:45 p.m., serve on Economical Mutual Insurance Company and file with the Financial Services Commission of Ontario (with a Statement of Service in Form F) his written submissions regarding Economical’s Appeal.
Final oral submissions in these matters will be heard on June 17, 2011.
Economical Mutual Insurance Company is entitled to its legal expenses of my March 4 and April 11, 2011 Orders, fixed in the amount of $750 for both motions, inclusive of all legal expenses and applicable HST, payable in the cause.

April 19, 2011

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

Mr. Dhanraj Jaggernauth was injured in an August 6, 2005 motor vehicle accident and sought statutory accident benefits under the Schedule¹ from his first-party automobile insurer, Economical Mutual Insurance Company (“Economical”). In his December 20, 2010 preliminary issue order, Arbitrator Feldman (the “Arbitrator”) determined that Mr. Jaggernauth had sustained a catastrophic impairment as defined by clause 2(1.2)(f) of the Schedule.

In my March 4, 2011 interim appeal order:

I exercised my discretion under Rule 50.2 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010) (the “Code”) to accept Economical’s Notice of Appeal from a preliminary arbitration order.
I denied Economical’s request for a stay of the Arbitrator’s December 20, 2010 Order.
I deferred the legal expenses of my order to the conclusion of this appeal, subject to any other or further order of an appeals adjudicator.

I further set time lines for the exchange of further documentation, including that the Respondent had twenty days from the date of my preliminary appeal order to deliver his Response to Appeal.

By Notice of Hearing dated March 9, 2011, June 17, 2011 was confirmed for oral submissions.

Mr. Jaggernauth’s letter received March 24, 2011 enclosed his Response to Appeal. It also enclosed a Notice of Cross-Appeal. The Cross-Appeal submitted the Arbitrator had erred in law in not assigning an additional whole person impairment rating of 5% for Mr. Jaggernauth’s skin disorder.

Economical’s letter later that same day requested that the Cross-Appeal be struck as it was time barred, being delivered more than thirty days after the Arbitrator’s December 20, 2010 Order.

My March 25, 2011 letter noted this issue as well as Mr. Jaggernauth having failed to provide the requisite $250 application fee under Section D, paragraph 1.2 of the Code, for an appeal of an arbitration order. Rule 51.2(e) of the Code provides that an appeal may be rejected if the appellant does not pay the required application filing fee. Both parties were given an opportunity to provide written submissions. Oral submissions were arranged for April 11, 2011.

Mr. Jaggernauth submits that the time lines of the Code regarding cross-appeals do not apply to cross-appeals from preliminary arbitration orders. He argues that it is common legal practice to file a Notice of Cross-Appeal at the same time a Response to Appeal is filed, that the Cross- Appeal is part of the Response to Appeal and that the time for filing his cross-appeal did not begin until the undersigned accepted Economical’s Notice of Appeal on March 4, 2011.

Mr. Jaggernauth asks, however, that if necessary, discretion be granted under Rule 52.2 of the Code to extend the time for delivering his cross-appeal, in the circumstances of this case. He also states that his failure to provide the requisite filing fee was an oversight that will be quickly remedied and that it presents no prejudice to the parties.

Economical submits that Rule 61.07 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that the time for serving a Notice of Cross-Appeal runs from the date of service of the Notice of Appeal. Under Rule 52.1 of the Code, however, a party seeking to appeal an arbitration order must do so within thirty days of that order, regardless of any appeal by the other party.

Economical argues that there is no provision in the Code that varies or creates an exception regarding the time to appeal from a preliminary arbitration order. While Rule 50.2 of the Code provides that an appeal from a preliminary order may be rejected, it does not alter or vary the time line for filing the appeal itself.

Economical further argues that as it was required to initiate its appeal within thirty days, notwithstanding it was appealing a preliminary order, Mr. Jaggernauth should be likewise obligated. Economical submits that the Code is clear that a Response to Appeal under Rule 53.1 and a Cross-Appeal under Rule 55.1 are distinct.

Economical further submits that Rule 1.1 of the Code provides that matters be dealt with in the most cost-effective and expeditious manner. It argues that there is a lack of reasonable grounds to grant an extension for the following reasons, in part:

It advised Mr. Jaggernauth on January 13, 2011, before the expiry of the thirty day limitation period, that Economical would be appealing the Arbitrator’s order.
Mr. Jaggernauth’s Notice of Cross-Appeal came as a complete surprise to Economical.
Economical will be prejudiced in having to address an alleged increased whole person impairment and in having to take time away from pursuing its appeal submissions to respond to this late cross-appeal.
Mr. Jaggernauth is taking advantage of Economical’s success in having its Notice of Appeal from a preliminary order being allowed to proceed at this time.
The late appeal and the failure to remit the requisite application filing fee are evidence of a lack of good faith by Mr. Jaggernauth.

Economical submits that if Mr. Jaggernauth’s Cross-Appeal is allowed to proceed, his conduct should be sanctioned by an interim order of costs.

II. ANALYSIS

Being persuaded that Mr. Jaggernauth’s failure to provide the application fee was due to inadvertence, as explained by the party, I allowed Mr. Jaggernauth until April 15, 2011 to pay the requisite application fee of $250. I acknowledge receipt on April 11, 2011 of Mr. Jaggernauth’s $250 cheque made payable to the Minister of Finance.

I do not agree with Mr. Jaggernauth that a Cross-Appeal is encompassed within a Response to Appeal. Rather, Rule 55.1 of the Code provides that if a respondent intends to appeal the arbitration order, a separate Notice of Appeal must be completed and the time periods for appeal as set out in the Code apply. Rule 52.1 of the Code, echoing subsection 283(2) of the Insurance Act, R.S.O. 1990, c. I.8, provides that an appellant must file a notice of appeal within thirty days of the date of the arbitration order.

Rule 52.2 of the Code echoes subsection 283(3) of the Insurance Act that the Director (or by virtue of subsection 6(4), his delegate) may extend the time for requesting an appeal on such terms as are considered appropriate, either before or after the thirty-day time limit, if he or she is satisfied that there are reasonable grounds for granting the extension.

Delegate McMahon, in Welsh and Economical Mutual Insurance Company, (FSCO P02-00024, April 23, 2003), confirmed the broad discretion to grant an extension of the time to file a Notice of Appeal. Delegate McMahon, in addressing whether to amend an existing appeal, held that:

the expiry of the time for initiating an appeal is not determinative;
the major factor to be considered is the existence or absence of potential prejudice, that is, prejudice that cannot be addressed by expenses or other relief;
other considerations are whether a question of law is raised, the length of the delay and any excuse for the delay; and,
the overriding principle is Rule 1.1 of the Code, that “[t]hese Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.”

Delegate Makepeace, in Driver and Traders General Insurance Company, (FSCO P03-00006, November 18, 2003), agreed with this approach. I find that these considerations are applicable to Rule 52.2 of the Code in considering whether to extend the time for a cross-appeal.

I am persuaded, pursuant to subsection 283(3) of the Insurance Act and Rule 52.2 of the Code, that there are reasonable grounds for extending the time for requesting the cross-appeal:

The late filing is relatively short, specifically given that much of this period was devoted to addressing whether Economical’s Notice of Appeal should be received at this time. In Levenson and General Accident Assurance Company of Canada, (OIC A-000260, September 29, 1992), a cross-appeal filed more than four months after the interim arbitration order in question was allowed to proceed.
The Cross-Appeal is relatively succinct, addressing only one area of impairment.
The Cross-Appeal raises an issue of law similar to that raised, in part, by Economical, namely whether the Arbitrator erred in law in rating specific impairments, including whether the Arbitrator erred in preferring the evidence of certain experts over others.
Economical’s Notice of Appeal was served January 19, 2011, one day before the deadline to appeal the Arbitrator’s Order. While Economical advised Mr. Jaggernauth January 13, 2011 it would be appealing the Arbitrator’s decision, it is a reasonable submission that Mr. Jaggernauth would not appeal an arbitration decision where he had been successful, nor was it unreasonable for him to await an adjudicative decision whether Economical’s appeal from a preliminary decision would be accepted, before filing a Cross-Appeal.
Any prejudice to Economical can be remedied in appropriate directions and conditions, including adhering to the existing time lines and oral hearing date, as follow, as provided both orally and by confirming letter on April 11, 2011:

(a) Adapting Rule 30 of the Code, as allowed by Rule 1.2, the Notice of Appeal and Cross-Appeal are combined on the basis they have issues or questions of law, fact and policy in common and that so doing will result in the most just, quickest and least expensive means to deal with these proceedings.

(b) Endeavouring to adhere to the previously set time lines, there being no objection, the need for Economical to serve and file a Response to Appeal to the Cross-Appeal is waived.

(c) At Economical’s request, and on consent, I am extending to May 2, 2011, at 4:45 p.m., for Economical to serve on Mr. Jaggernauth and file with the Financial Services Commission of Ontario (the “Commission”), with a Statement of Service in Form F, its written submissions regarding its Appeal.

(d) Mr. Jaggernauth will also have until May 2, 2011, at 4:45 p.m., to serve on Economical and file with the Commission (with a Statement of Service in Form F) his written submissions regarding his Cross-Appeal.

(e) Economical Mutual Insurance Company shall, pursuant to Rule 54.3 of the Code, and on consent, by May 24, 2011, at 4:45 p.m., serve on Mr. Jaggernauth and file with the Commission (with a Statement of Service in Form F) its written submissions regarding the Cross-Appeal.

(f) Mr. Jaggernauth shall, by May 24, 2011, at 4:45 p.m., serve on Economical Mutual Insurance Company and file with the Commission (with a Statement of Service in Form F) his written submissions regarding Economical’s Appeal.

(g) With the agreement of both parties, final oral submissions in these matters will be heard on June 17, 2011, as originally set and confirmed by the Commission’s March 9, 2011 Notice of Hearing.

During oral submissions, Economical requested until April 18, 2011 to confirm whether it would be moving to amend its Notice of Appeal. Accordingly, I held down any expense order. By letter dated April 15, 2011, Economical advised it would not be moving to amend its Notice of Appeal. It, therefore, asked that the legal expenses of these preliminary issue decisions now be addressed.

Economical seeks $750 to $1,000 inclusive of both my March 4, 2011 Order accepting its Notice of Appeal from a preliminary arbitration order and this present Order. Mr. Jaggernauth, specifically noting Economical’s success in my March 4, 2011 order, does not oppose an expense order in Economical’s favour regarding both decisions. He concedes $750 as being reasonable.

Accordingly, I find Economical entitled to its legal expenses of both of these preliminary issue appeal orders, fixed in the amount of $750, inclusive of all legal expenses and applicable HST. Given that the outcome on the substance of these appeals is still pending, this expense order shall be payable in the cause.