Neutral Citation: 2011 ONFSCDRS 5

FSCO A10-001323

BETWEEN:

FONG-WAI LAWRENCE HUANG Applicant

and

CO-OPERATORS GENERAL INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Denise Ashby

Heard: December 10, 2010, at the offices of the Financial Services Commission of Ontario in Toronto

Appearances: Owen Elliot on behalf of himself No one appearing for Mr. Huang Melanie Malach for Co-operators General Insurance Company

Issues:

The Applicant, Fong-Wai Lawrence Huang, was involved in a motor vehicle accident on May 27, 2008. He applied for statutory accident benefits from Co-operators General Insurance Company ("Co-operators"), payable under the Schedule.¹ Co-operators refused to pay benefits. The parties were unable to resolve their disputes through mediation, and Mr. Huang applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Should Mr. Elliot be removed as Mr. Huang's representative of record pursuant to Rule 9 of the Dispute Resolution Practice Code?
Should Mr. Huang's claim be dismissed without a hearing pursuant to Rule 68 or deemed withdrawn pursuant to Rule 70 of the Dispute Resolution Practice Code?
Is Mr. Huang liable to pay Co-operators' expenses pursuant to subsection 282(11) of the Insurance Act?

Result:

Mr. Elliot is removed as Mr. Huang's representative of record effective December 10, 2010.
Mr. Huang's Application for Arbitration is deemed withdrawn.
Mr. Huang shall pay Co-operators' expenses fixed at $1,000.00 inclusive of HST.

CHRONOLOGY:

On February 2, 2010, the Report of Mediator was released.
On May 5, 2010, the Commission received Mr. Huang's Application for Arbitration dated April 26, 2010.
On May 27, 2010, the Commission issued a Notice of Pre-hearing in respect of the Pre-hearing scheduled for September 29, 2010.
On June 7, 2010, the Commission issued a Notice of Rescheduled Pre-hearing advising that at the request of Mr. Huang's representative the Pre-hearing was rescheduled to October 14, 2010.
On October 14, 2010, I issued a pre-hearing letter in which it was agreed the Pre-hearing would be rescheduled to November 19, 2010, on the basis that Co-operators' representative was unable to attend because of a family emergency and Mr. Huang did not attend notwithstanding he was served with Notice of the Rescheduled Pre-hearing.
On October 15, 2010, the Commission issued a Notice of Rescheduled Pre-hearing to be held by teleconference on November 19, 2010.
On November 12, 2010, the Commission issued a Notice of Motion in respect of Mr. Huang's representative's motion to be removed as representative of record. The motion was returnable at the teleconference scheduled for November 19, 2010.
On November 19, 2010, I convened and subsequently adjourned the Rescheduled Pre-hearing. Mr. Huang did not attend, notwithstanding the Notice of Rescheduled Pre-hearing had been couriered to him at the address on the Commission's records and I attempted to contact him by telephone immediately prior to the proceeding.

I declined to hear Mr. Elliot's motion to be removed on the basis that he had not given Mr. Huang sufficient notice. Following the proceeding, I left a further voice mail message for Mr. Huang advising him of the motions to be heard on December 10, 2010, as set out below.

My letter of the same date, which was couriered to Mr. Huang, contains the following Order:

Mr. Elliot shall forthwith courier a letter to his client, Mr. Huang, copied to the Co-operators and the Commission setting out the reasons Mr. Elliot seeks to be removed as Mr. Huang's Representative of Record together with such supporting materials that Mr. Elliot deems appropriate and advising him that the motion previously scheduled for November 19, 2010 has been adjourned to be heard on Friday, December 10, 2010 at 10:00 a.m. by teleconference to be arranged by the Financial Services Commission.
Co-operators General Insurance Company shall serve Mr. Huang by courier with its motion record in respect of its motion to have Mr. Huang's arbitration proceeding dismissed without a hearing.
The rescheduled pre-hearing scheduled to take place on Friday, November 19, 2010 is adjourned to a date to be set following the hearing of the motions set out above.

On November 19, 2010, the Commission issued a Notice of Rescheduled Motion returnable on December 10, 2010 which was couriered to Mr. Huang.
On November 23, 2010, Mr. Elliot filed his letter to Mr. Huang dated November 23, 2010 with the Commission.
On November 24, 2010, Co-operators filed its Motion Record seeking dismissal of Mr. Huang's claim with the Commission.
On December 10, 2010, I called Mr. Huang and left a message advising that the motions referred to in the Notice of Motion dated November 19, 2010 were about to commence. I indicated I intended to deal with his Representative's motion to be removed as his representative at 10:00 a.m. following which I would recess for 30 minutes prior to hearing Co-Operators' motion for dismissal. I called Mr. Huang again and he was unavailable. I advised that I was proceeding to hear the motion to dismiss in his absence.

EVIDENCE AND ANALYSIS:

Removal as Representatives of Record:

Mr. Elliot relied on his letter, couriered to Mr. Huang, dated November 23, 2010. He enumerated a number of unsuccessful attempts to contact Mr. Huang and obtain his instructions in respect of the Arbitration. As Mr. Huang failed to respond to either his correspondence or telephone messages, Mr. Elliot submits that there has been a breakdown in the solicitor-client relationship such that he cannot continue to represent Mr. Huang.

Co-operators took no position with respect to this issue.

I found that Mr. Huang's failure to communicate with his representative over a period of months, during which several proceedings had been scheduled, was sufficient grounds for removing Mr. Elliot as Mr. Huang's representative effective immediately.

Dismissal of Claim:

Co-operators' motion to dismiss Mr. Huang's claim without a hearing pursuant to Rule 68.1 of the Dispute Resolution Practice Code ("DRPC") is unopposed. On the basis of the foregoing chronology, I find that Mr. Huang had notice of all proceedings scheduled, rescheduled and resumed at the Commission. Further, I find that he received a copy of Co-operators' motion record on or about November 24, 2010 pursuant to Rule 7.3(b) of the DRPC. Since its receipt, Mr. Huang has not communicated an intention to file submissions in response.

Co-operators submits that Mr. Huang's failure to attend the rescheduled and resumed pre-hearings, notwithstanding notice, is a failure to participate in the process such that he meets the test set out in Rule 68 of the DRPC.

There are two lines of cases dealing with the issue of applicants abandoning proceedings. Those in which proceedings are dismissed without a hearing pursuant to Rule 68² and others that rely on a principle of "deemed" or "constructive withdrawal" under Rule 70.3.³ Both strategies seek to interpret the Rules in a manner consistent with Rule 1.1 which requires that the Rules be interpreted broadly to achieve the most just, quickest and least expensive resolution of disputes.

Rule 68.1 provides: "Subject to Rule 68.2, an adjudicator may dismiss a proceeding without a hearing where the proceeding is frivolous, vexatious or is commenced in bad faith". Rule 68.2 requires the adjudicator to deliver written notice to all parties of the intention to dismiss pursuant to Rule 68.1. Rule 68.3 makes provision for a party to object to the dismissal.

Rule 68 is similar to Section 4.6(1) of the Statutory Powers Procedure Act, R.S.O. 1990, Chapter S-22, ("SPPA"), which provides for dismissal without a hearing where the proceeding is frivolous, vexatious or is commenced in bad faith; relates to matters beyond the jurisdiction of the tribunal or some aspect of the statutory requirements for bringing the proceeding has not been met.

The phrase "frivolous, vexatious or brought in bad faith" is undefined in the Insurance Act, the Schedule, the DRPC and the SPPA. In Fedoseev and RBC, I considered the definitions found in Black's Law Dictionary, 6th Edition, in concluding that the threshold of "frivolous, vexatious or brought in bad faith" as set out both in Rule 68 and the SPPA is necessarily high as dismissal of a claim without hearing extinguishes the party's right to advance the claim.⁴

Mr. Huang's Application for Arbitration, in which he claimed entitlement to medical benefits, rehabilitation benefits, housekeeping and home maintenance benefits and examination expenses, was signed by his former counsel. Following the filing of the Application, Mr. Huang had no other involvement in the arbitration process. I am not convinced that his unexplained absences are evidence of a groundless claim or a malicious purpose or dishonest conduct. However, his non-participation does interfere with the proper administration of the dispute resolution process. As well, it hinders Co-operators' right to a speedy and inexpensive resolution of the matter.

In the absence of a rule which deals with abandoned claims, Rule 70, the rule respecting withdrawal, provides an alternative. Rule 70.3 provides an adjudicator the authority to permit a withdrawal even in the face of a party's objection on such terms and conditions as he or she considers just and expenses may be awarded to either party. As Mr. Huang has not communicated with his counsel or participated in any of the proceedings of which he had notice, I find that he has withdrawn from the process. This result provides the Commission with a procedure to administratively close its file. It provides Co-operators a basis for concluding that further proceedings are unlikely and it does not extinguish Mr. Huang's claim. This broad interpretation of Rule 70.3 is consistent with the mandate that the Rules should be interpreted broadly to produce the most just, quickest and least expensive resolution of the dispute.

EXPENSES:

Rule 70.3(b) provides an arbitrator with the authority to award expenses where a claim is withdrawn. Mr. Huang has failed to communicate with either his former representative or the Commission. He has not attended proceedings of which he had notice. He has failed to explain his absences at these proceedings. As a consequence, Co-operators has incurred unnecessary legal expenses. Therefore, I find that Mr. Huang is liable to pay Co-operators' expenses pursuant to subsection 282(11) of the Insurance Act.

Co-operators did not provide a Bill of Costs. I exercise my discretion to assess and fix expenses based on the materials filed and the submissions made.

Mr. Huang did not attend the Rescheduled Pre-hearing on October 14, 2010. However, Co-operators' representative was also absent. Therefore I do not find that this missed date should be factored into an award of expenses.

The Rescheduled Pre-hearing of November 19, 2010 did not proceed. This was due in part to Mr. Huang's absence but predominantly because I ruled that he had not been given sufficient notice of his counsel's intention to seek an order removing him as Representative of Record. Therefore, I will not factor this attendance into an award of expenses.

The Motion Record served and filed by Co-operators was essentially a Notice of Motion which would not have required significant time to prepare. Counsel prepared a Response to the Application for Arbitration which included a brief, she consulted with her client and prepared for the pre-hearing and attended the Motion. I therefore fix Co-operators' expenses in this Arbitration at $1,000.00 inclusive of HST.

January 12, 2011

Denise Ashby Arbitrator

Financial Services Commission of Ontario