Financial Services Commission of Ontario
Neutral Citation: 2012 ONFSCDRS 40
FSCO A11-002826
BETWEEN:
DOUGLAS FACEY
Applicant
and
INTACT INSURANCE COMPANY
Insurer
DECISION ON MOTION
Before: Richard Feldman
Heard: January 25 and 26, 2012, at the offices of the Financial Services Commission of Ontario (“FSCO”) in Toronto.
Appearances: Eric Grossman for the Insurer (moving party) Marko Djukic for the Applicant (responding party)
Issue:
This is a motion by the Insurer for a stay1 of this proceeding because the Insurer has commenced proceedings in court that involved related matters.
Result:
The request for a stay is denied.
OVERVIEW:
The Insurer2 has brought a motion for a stay of proceedings in this and fourteen other cases.3 The Insurer requested that all of these motions be heard together. This request was not opposed by the Applicants and I granted the Insurer’s request that these motions be heard together.4
Over the past few years, the Insurer has received numerous claims for accident benefits submitted by or on behalf of insured persons from Assessment Direct Inc., Osler Rehabilitation Centre Inc. and Metro Rehabilitation Centre Inc. (hereinafter referred to collectively as “the Facilities”). The Insurer has concluded that these Facilities are related to each other and that many of the claims submitted by the Facilities are of dubious merit and that the Facilities have engaged in conduct that was deliberately intended to unjustly enrich the Facilities. In some cases, the Insurer believes that it can prove that the Facilities made misrepresentations to the Insurer.
In the summer of 2011, the Insurer commenced an action in the Ontario Superior Court of Justice (Court File No. CV-11-428030) against the Facilities and their principals (the “Defendants”) for, amongst other relief: $15,000,000 in general and punitive damages (which includes the return of approximately $5,000,000 paid by the Insurer to the Facilities); a declaration of unjust enrichment; an accounting and disgorgement of profits by the Defendants; and a declaration that the Insurer need not pay any future or outstanding amounts to the Defendants. That action is still at the very earliest stages as the Insurer is still in the process of serving the Statement of Claim upon some of the Defendants.
The invoices that are in dispute in that court action were submitted by the Facilities to the Insurer on behalf of 218 individual insured persons. The Insurer has not named any insured person as a defendant in that court action. The Insurer has not alleged that any insured person has conspired with the Facilities in the alleged wrongful conduct. Some of those 218 insured persons, including the Applicant in this case and the other fourteen cases heard together with this one, have been denied accident benefits by the Insurer and have chosen to have those disputes adjudicated at FSCO.
In the fifteen motions before me, the Insurer is seeking a stay of these proceedings, on such terms as FSCO deems appropriate. In the alternative, if I am not prepared to stay the entire proceeding, the Insurer is seeking a stay of all issues related directly or indirectly to the Facilities.5 The Insurer is seeking a stay of the FSCO proceedings until the conclusion of its court action. In two of fifteen cases, the Insurer is arguing, in the alternative, that a stay is warranted due to the refusal of the Applicant to submit to an examination under oath and is seeking a stay until such time as the Applicant does submit to such an examination. In all fifteen cases currently before me, the Applicants oppose any stay of the FSCO proceedings.
The affidavit, factum and book of authorities filed on behalf of the Insurer (the moving party) were supplemented by lengthy oral argument by counsel for the Insurer. No affidavit was filed on behalf of the Applicant(s) but I did receive a factum and book of authorities and I heard oral submissions from counsel who appeared on behalf of all fifteen Applicants. I have considered all of the written material filed and have considered the arguments advanced by counsel for the parties. For the sake of brevity, I will summarize in broad terms the positions of the parties but it should be recognized that any attempt to provide a summary will, by necessity, fail to reflect some of the nuances of the submissions that were actually made before me.
SHOULD A STAY BE GRANTED AS A RESULT OF THE PENDING COURT ACTION?
SUBMISSIONS OF THE INSURER
Insurer’s counsel took up considerable time reviewing the apparent merits of each of the fifteen cases. The Insurer’s position is that the claims advanced by each of these Applicants is suspicious because:
- in most of these cases, the claims advanced by the Applicants relate exclusively to services provided and/or recommended by the impugned Facilities;
- the Facilities often recommended large amounts of treatment (in terms of the number of plans submitted, the frequency and duration of the recommended treatment sessions and the overall cost of same) and extensive assessments for what appear to be relatively minor, soft-tissue injuries;
- the Facilities continued to recommend treatment even when