Zurich Insurance Company Ltd. (Commercial Business) v. Paraloganathan Nadesu, 2012 ONFSCDRS 4

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2012 ONFSCDRS 4

Appeal P11-00031

Appellant

And

Respondent

BEFORE:

Delegate Lawrence Blackman

Mr. William M. Sproull for the Appellant, Zurich Insurance Company Ltd. (Commercial Business)

Mr. David S. Wilson for the Respondent, Mr. Paraloganathan Nadesu

January 19, 2012 oral submissions and by written submissions

PRELIMINARY APPEAL ORDER

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

The Appellant is permitted to withdraw this appeal pursuant to Rule 70 of the Dispute Resolution Practice Code (Fourth Edition - Updated August 2011), on the following terms:

(a) The withdrawal is without prejudice to either party commencing a further appeal in accordance with the Code, including an appeal of the issues in this present appeal.

(b) The Appellant shall pay the Respondent his legal expenses of this present appeal fixed at $881.40, payable forthwith in any event of the cause.

In the event this appeal is not withdrawn on the above terms within seven days of the date of this decision, pursuant to Rule 51.2(c) of the Code, this appeal is rejected on the following terms:

(a) The rejection of this present appeal is without prejudice to either party to commence a further appeal in accordance with the Code, including an appeal of the issues in this present appeal.

(b) The Appellant shall pay the Respondent his legal expenses of this appeal fixed at $881.40, payable forthwith in any event of the cause.

January 23, 2012

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The Respondent, Mr. Paraloganathan Nadesu, was injured in a September 7, 2003 motor vehicle accident and applied to his first party insurer, the Appellant, Zurich Insurance Company Ltd. (Commercial Business), for statutory accident benefits under the Schedule.¹

The October 14, 2009 arbitration pre-hearing letter indicated that $1,800 in Botox treatment was in issue between the parties. The April 21, 2010 pre-hearing added the issues of catastrophic impairment and post two-year housekeeping benefits, the latter issue subsequently resolving. The arbitration hearing started June 21, 2010 before Arbitrator Kominar (the “Arbitrator”). The hearing is scheduled to conclude on February 2 and 3, 2012.

In the interim, by letter dated October 7, 2011, the Appellant requested that the Arbitrator adjourn the hearing resumption. The Appellant submitted that due to the death of its expert, Dr. S. Shapiro, who had not yet testified, it needed time to identify an alternate or replacement psychiatrist familiar with catastrophic impairment assessment under paragraph 2(1.2)(g) of the Schedule. The Respondent opposed the adjournment request.

The Arbitrator’s November 1, 2011 letter decision denied the adjournment. The Appellant’s Notice of Appeal, received December 2, 2011, asked that the Arbitrator’s November 1st order be set aside and an appellate order issued, in part, permitting it to adduce evidence from another psychiatrist. The Appellant also submitted that fairness required a reversal of the Arbitrator’s June 22, 2010 order not allowing into evidence the May 26, 2010 report of Dr. A. Margulies.

My December 7, 2011 letter to the parties noted that the Notice of Appeal sought leave to appeal from a preliminary or interim order, with submissions in support. Rule 50.2 of the Dispute Resolution Practice Code (Fourth Edition - Updated August 2011) (the “Code”) provides that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute have been finally decided, unless ordered otherwise. Rule 51.2(c) states that an appeal may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute.

The Respondent’s December 15, 2011 submissions asked that the appeal be rejected. By letter dated December 16, 2011, the Appellant’s counsel requested a brief indulgence to consult with his client. His December 20, 2011 letter advised that he had instructions to forego pursuit of this appeal at this time, without prejudice to his client’s right to pursue an appeal once the Arbitrator’s final decision was rendered.

My December 21, 2011 letter requested clarification whether this was a consent, without prejudice, withdrawal under Rule 70 of the Code, or whether some other resolution was being requested.

The Respondent’s December 23, 2011 letter indicated he did not object to the withdrawal, subject to the Appellant paying his legal expenses fixed at $711.90. The Appellant’s January 10, 2012 letter proposed that the present appeal be stayed or adjourned pending the parties’ final arbitration submissions in February. The Appellant did not object to the Appellant’s $711.90 expense claim, but proposed that the expense issue also be stayed or adjourned. By letter dated January 11, 2012, the Respondent indicated he did not consent to this proposal.

A January 19, 2012 telephone conference call was convened to hear brief oral submissions as to the disposition of this appeal. The Appellant requested that the preliminary appeal issue whether to accept this present appeal be adjourned or stayed. Time or event limitations on the adjournment or stay were not suggested. Rather, there was discussion, in part, of potential appeals of possible further preliminary or interim orders.

Delegate Makepeace, in Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), held that the purpose of Rule 50.2 of the Code is to:

… facilitate the most cost-effective resolution of disputes by minimizing the time and money spent on procedural or collateral matters. The decision whether to hear an appeal of a preliminary order is discretionary … the over-arching principle guiding the exercise of the discretion is that the rule “should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute.” The criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether rejecting the appeal or hearing it will prejudice either party.

Appeals is not a parking lot. Nor should it be seen as creating an express elevator between arbitration and appeal so that every interim or preliminary order can, on an expedited basis, be subject to immediate appellate review.

Rather, the guiding principles, noted in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33, in deferring to first level adjudicators the finding of facts, also apply to the purpose behind Rules 50.2 and 51.2(c) of the Code:

(1) The number, length and cost of appeals should be limited. Judicial resources are scarce and needless duplication of judicial proceedings with little, if any improvement in the result, should be avoided while concurrently not prejudicing litigants with fewer resources and frustrating the goal of providing an efficient and effective remedy.

(2) The autonomy and integrity of first level proceedings should be promoted. An appeal is the exception rather than the rule. Frequent and unlimited appeals weaken public confidence in the trial process and undermine the presumption that a first level adjudicator is competent to decide the case before him or her and that a just and fair outcome will result from the trial process.

(3) The expertise and advantageous position of the first level adjudicator should be recognized.

I am not persuaded that it is the most cost-effective, efficient or quickest resolution of this dispute to stay or adjourn the question of whether to accept or reject this present appeal awaiting word as to whether and, if so, on what basis a party may wish to proceed. To accept such an approach, specifically in the circumstances of this case, would render Rules 50.2 and 51.2(c) of the Code meaningless and run counter to the principles noted above.

Looking at the justice of the case, the Appellant was unable to advise as to any prejudice it would suffer if this present appeal was rejected without prejudice to it being able to pursue a further appeal that included the present appeal issues. Accordingly, the Appellant’s request for a stay or adjournment of the question of whether to accept or reject this present appeal is refused.

The Appellant asked, in the alternative, that it be permitted to withdraw this appeal. Rule 70.2 of the Code provides that an adjudicator may permit a party to withdraw all or part of a dispute where all parties agree. Rule 70.3 states that where a party does not agree to the withdrawal, an adjudicator may:

(a) permit the withdrawal on such terms and conditions as he or she considers just;

(b) award expenses to either party as permitted by Rule 75 and following.

The Respondent agrees to the withdrawal of this present appeal on the condition that he be awarded his expenses, now set at $881.40. While entitlement to such expenses is not conceded, the Appellant does not object to the actual quantum of the expense claim.

Rule 70.3 allows an award of expenses under Rule 75 as a term of permitting a withdrawal. One consideration of Rule 75 is whether any aspect of the proceeding was unnecessary. The Appellant has reconsidered its position regarding presently advancing this appeal. While that decision may be prudent in avoiding further unnecessary delay and expense, the Respondent has been put to unnecessary expense in the interim. Pursuant to Rule 70.3 of the Code, I am persuaded that the Appellant be permitted to withdraw this appeal on the following terms:

(a) The withdrawal is without prejudice to either party commencing a further appeal in accordance with the Code, including an appeal of the issues in this present appeal.

(b) The Appellant shall pay the Respondent his legal expenses of this present appeal fixed at $881.40, payable forthwith in any event of the cause.

While the Appellant is permitted to withdraw on the terms noted, it is not obligated to now withdraw. Given that the arbitration hearing is presently scheduled to conclude shortly, in the event that the Appellant is not prepared to withdraw this appeal on the above terms within seven days of the date of this order, I exercise my discretion under Rule 51.2(c) of the Code to reject this appeal from a preliminary or interim order on the following terms:

(a) The rejection of this present appeal is without prejudice to either party to commence a further appeal in accordance with the Code, including an appeal of the issues in this present appeal.

(b) The Appellant shall pay the Respondent his legal expenses of this appeal fixed at $881.40, payable forthwith in any event of the cause.

I exercise this discretion on the basis that (1) neither party presently wishes to proceed with this appeal, (2) the Appellant is unable to advise as to any prejudice to it in rejecting this present appeal while allowing it to commence a further appeal that includes the within issues, and (3) rejecting this present appeal eliminates the unnecessary expenditure in time and expense in having two concurrent proceedings.

January 23, 2012

Lawrence Blackman Director’s Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.