Tharmabaskaran v. Security National Insurance Co./Monnex Insurance Mgmt. Inc., 2011 ONFSCDRS 59

Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 59 Appeal: P09-00038

OFFICE OF THE DIRECTOR OF ARBITRATIONS

THARMARAJ THARMABASKARAN Appellant

and

SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC. Respondent

BEFORE: David Evans

REPRESENTATIVES: Mariana Slomyanski for Mr. Tharmabaskaran Alexander Lempp for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

HEARING DATE: April 13, 2011

APPEAL ORDER

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

1. The appeal of the Arbitrator’s decision dated October 16, 2009 is hereby dismissed.

2. An appeal legal expense hearing shall be requested within thirty days of the date of this decision, accompanied by a Bill of Costs and written submissions, as set out below.

July 14, 2011

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Tharmabaskaran appeals the Arbitrator’s order that due to a multiplicity of accident benefits proceedings the arbitration proceeding should be dismissed.

II. BACKGROUND

Mr. Tharmabaskaran was involved in an accident on July 27, 2007 and applied for statutory accident benefits from Security National Insurance Co./Monnex Insurance Mgmt. Inc. (“Security National”) pursuant to the SABS–1996.¹ On November 4, 2008, Mr. Tharmabaskaran filed an application for arbitration claiming attendant care benefits against Security National, as well as costs, interest and a special award. On November 5, 2008, he also filed a Statement of Claim against Security National for housekeeping/home maintenance expenses, weekly income replacement benefits, outstanding medical expenses, the cost of an examination, interest, his costs and punitive damages.

At the arbitration pre-hearing, Security National moved to dismiss the arbitration claim on the basis of duplication of claims. The motion proceeded by way of written submissions.

The Arbitrator reviewed the various criteria to balance whether it was reasonable to maintain multiple legal proceedings, as discussed below. In his decision dated October 16, 2009, he found that the “more comprehensive nature of Mr. Tharmabaskaran’s claims in court, the diseconomy of maintaining two actions, lack of prejudice to him and failure to offer a reasonable explanation why he seeks to separately arbitrate attendant care outweigh his choice of this forum.” He ordered that the arbitration be dismissed thirty days from the date of the order to allow it to be withdrawn and the attendant care benefit claim joined to the lawsuit. He also awarded Security National $500 for its expenses of the motion.

III. ANALYSIS

A number of the appeal submissions relate to procedural or fairness issues.

First, Mr. Tharmabaskaran submits that there is a reasonable apprehension of bias, simply on the basis that the Arbitrator conducted the pre-hearing. He cites Rule 33.5 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010) (the Code), which provides that “An arbitrator who presides at a pre-hearing discussion at which the parties attempt to settle some or all of the issues in dispute will not preside at the hearing unless the parties consent.” He submits that it was inappropriate for the Arbitrator, as the pre-hearing arbitrator, to decide a motion which resulted in a final order.

As noted by Security National, pre-hearing arbitrators have often decided motions that may result in a final order, including cases dealing with concurrent FSCO and court cases. Security National cites as examples Andreeski and Pilot Insurance Company, (OIC A96‑000714, March 26, 1997), Oliveira and Markel Insurance Company of Canada, (OIC A‑006434, February 9, 1995), and King and Royal Insurance Company of Canada, (FSCO A98‑000234, March 23, 1999). In any event, Mr. Tharmabaskaran’s position was rejected in Jafri and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO P10-00002, April 21, 2010), in which the Delegate refused to admit an appeal from a similar preliminary issue.²

In Jafri, Director’s Delegate Blackman noted that Rule 33.5 of the Code does not provide a blanket prohibition against the pre-hearing arbitrator presiding at the hearing, or at a subsequent motion. The only prohibition is if the parties had attempted “to settle some or all of the issues in dispute.” He was not persuaded that deciding not to engage in settlement discussions is a settlement discussion. He also noted that finding a pre-hearing arbitrator’s jurisdiction to discuss settlement prevents that arbitrator from presiding at a hearing even when there has been no settlement discussion would render Rule 33.5 meaningless. I agree with these conclusions. Since there is not even a suggestion in this case that settlement discussions took place, Rule 33.5 does not apply and there is no reasonable apprehension of bias.

Second, at the arbitration hearing, Mr. Tharmabaskaran submitted that the documents Security National relied on for the information about his claims were inadmissible. However, the Arbitrator noted that he received “no facts, specific allegations or alternate documents to establish that Security National’s documents contain any inaccuracy” and accepted them. Mr. Tharmabaskaran submits on appeal that this unfairly placed the burden of proof of the motion on him. However, the documents in question are, for instance, the Statement of Claim and the Application for Arbitration in his name. The documents obviously appear to be his, so if there was any inaccuracy in them, or if they were not his, it was up to him to have pointed that out, as the Arbitrator found. That does not constitute putting the onus of the entire proceeding on Mr. Tharmabaskaran.

Third, and on a point that leads towards the substance of the appeal, Mr. Tharmabaskaran submits that an insured’s right to choose a forum is absolute, so the Arbitrator exceeded his jurisdiction in dismissing the arbitration on the basis that he should have brought the attendant care claim in another forum. However, the case law is well established that there is no such absolute right of forum choice. The Arbitrator cited and relied on cases illustrating that point, such as King and Royal Insurance Company of Canada, (FSCO A98-000234, March 23, 1999), and Non-Marine Underwriters, Mbrs. of Lloyd’s and Mangat, (FSCO Appeal P00-00020, August 1, 2000). Thus, in Mangat, it was found that while an insured person has a choice of forum, there is not an unfettered election with respect to each claim. Accordingly, the Arbitrator was not exceeding his jurisdiction in dismissing the arbitration in light of the concurrent court proceeding.

As for the substance of the appeal, Mr. Tharmabaskaran submits that there is no multiplicity of proceedings because he is seeking different benefits in court and at FSCO. However, as stated in Royal and SunAlliance Insurance Company of Canada and Reid, (FSCO P00-00014, August 1, 2000), an insured person who has already elected to go to court on accident benefits does not have an absolute right to take later cases to arbitration, even if they involve different benefits. Instead, based on the cases cited above, the Arbitrator considered the relevant criteria for multi-forum disputes: (1) the similarity or overlap of the issues; (2) economy of consolidation; (3) the timing of the actions and risk of delay to the conclusion; (4) risk of inconsistent results; (5) impediments to the processes; and (6) the insured’s right to forum choice.

Having regard to those criteria, the Arbitrator found that the lawsuit was more comprehensive. While he was not persuaded that there was necessarily a risk of inconsistent results, he found there was “a reasonable likelihood that most of the health care documents being tendered as evidence in this arbitration on the attendant care benefit will also be used for the lawsuit” and the parties would “call some of the same health care experts to testify in the arbitration and lawsuit,” leading to a significant diseconomy.

Mr. Tharmabaskaran submits that the Arbitrator erred in making a finding that the evidence would likely be the same in both the court and the FSCO cases without any evidence to that effect being presented, and that

even if the evidence were to be completely same for both proceedings, this does not automatically mean that the relief being sought with respect to the different benefits are also the same. In other words, using the Arbitrator’s incorrect reasoning, there would be no point in separating benefits into different issues, if all these benefits result in the ‘same relief’ anyway. Furthering that, that means that an Appellant’s tort case, which would ‘likely’ also use the same witnesses and medical evidence would also lead to a dismissal of a FSCO arbitration.

However, the Arbitrator was taking a pragmatic approach, as set out in Mangat, based on his practical experience of accident benefits cases. Given that the lawsuit and the proceeding here are both about accident benefits, the Arbitrator’s finding was logical. After all, it is difficult to see how one could conduct an attendant care hearing at FSCO without also discussing the accident’s impact on work and housekeeping and other matters that would be raised in the lawsuit. As for taking the argument to the extreme – that any FSCO case would have to be moved to court if there were a tort case – a primary criterion in dual forum cases is that the same parties are involved in both proceedings, as is the case here. That would not be so between an accident benefits and a tort case. Therefore, a FSCO arbitration could not be dismissed simply on the basis that there was also a tort case.

In a somewhat similar vein to the submission about who has the burden of proof for admitting documents, Mr. Tharmabaskaran submits that the Arbitrator erred in stating that, while he agreed that combining the attendant care claim into the lawsuit would delay its resolution, Mr. Tharmabaskaran did not “argue or present any facts that time is of the essence in adjudicating his attendant care claim.” Mr. Tharmabaskaran submits that as the burden of proof was on Security National, it had to present evidence on how his claim would not be prejudiced by the delay in determining his attendant care claim.

However, Mr. Tharmabaskaran ignores the context in which the Arbitrator made this statement. First, as the Arbitrator noted, Security National consented to joining the attendant care claim into the lawsuit, so he did not see a significant prejudice from the delay. Second, and more importantly, he noted that Mr. Tharmabaskaran did not offer any explanation as to why he split his claims between arbitration and court when he mediated all benefits simultaneously, adding:

It is trite law that multiple proceedings should be avoided, and in my view, it is fatal to file separate and virtually simultaneous proceedings on accident benefits without a reasonable explanation. Mr. Tharmabaskaran’s failure to explain this situation raises a reasonable inference that he filed this arbitration to expose Security National to duplicative defence costs, rather than to efficiently and speedily adjudicate this particular issue.

As I stated in Certas Direct Insurance Company and Gordyukova, (FSCO P10-00017, March 17, 2011),³ the general thrust of the case law is that an applicant should select a forum and stick with it. Mr. Tharmabaskaran did not do that in this case, but instead, as the Arbitrator noted, filed separate and simultaneous proceedings. For the reasons discussed above, this required an explanation, which was not forthcoming. In that context, it was not up to Security National to show that Mr. Tharmabaskaran would not be prejudiced by the delay in requiring the attendant care benefits to be heard in court. The Arbitrator therefore did not place an unfair burden on Mr. Tharmabaskaran.

The appeal is dismissed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an appeal legal expense hearing shall be requested within 30 days of the date of this decision in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010).

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.

July 14, 2011

David Evans 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. 2There was also a suggestion that the pre-hearing Arbitrator may have actually conducted settlement discussions, which was also rejected by the Delegate. His decision was upheld on judicial review on April 18, 2011, Wilson, Swinton, and Low, JJ, presiding, court file no. 244/10, unreported.
3. 3Currently under judicial review.