Financial Services Commission of Ontario

Neutral Citation: 2013 ONFSCDRS 68 FSCO A12-000697

BETWEEN:

HELEN OGBOE Applicant

and

TD GENERAL INSURANCE COMPANY Insurer

REASONS FOR ADJOURNMENT

Before: Arbitrator John Wilson Heard: April 11, and May 2, 2013 by teleconference Appearances: Kevin Wolf for Ms. Ogboe Pamela L. Blaikie for TD General Insurance Company

Issues:

The Applicant, Helen Ogboe, claimed to have been injured in a motor vehicle accident on June 27, 2010. She applied for and received statutory accident benefits from TD General Insurance Company (“TD General”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Ogboe applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

A pre-hearing was held in this matter on August 1, 2012 and firm dates for the arbitration hearing were set. The arbitration was set to commence on April 29, 2013.

On March 27, 2013, counsel for TD amended its Response and requested that the hearing be adjourned and heard together with two other claims for persons who claimed to be in the same car. TD also advised that it was now taking the position that the alleged incident on which all three claims were based was in effect a staged accident.

The issues in this hearing are:

1. Should the arbitration be adjourned to consolidate the three arbitrations arising out of the same controverted circumstances?
2. If so, should any conditions be placed on the adjournment?

Result:

1. The arbitration hearing shall be adjourned sine die to allow the question of consolidation of the three claims to proceed.
2. The parties shall not file any further evidence without leave of an arbitrator.
3. The adjournment date, when fixed, shall be peremptory to TD.
4. TD shall pay Ms. Ogboe’s expenses thrown away by the last minute adjournment which are fixed at $5000, payable forthwith in any event of the cause.

EVIDENCE AND ANALYSIS:

The hearing in this matter was scheduled to begin on April 29, 2013. Only four days were set for the entire hearing since it was to deal only with the substantive claims of Ms. Ogboe.

By letter dated March 27, 2013, TD amended its Response to include a claim for misrepresentation pursuant to section 48 of the Schedule.

Ms. Ogboe, through her counsel Mr. Wolf, resisted TD’s request to adjourn this matter. As he stated in his submissions, it is puzzling that TD waited so long before raising the issue of material representation with regard to the facts of the accident.

Counsel for TD has confirmed that they have been aware of the circumstances surrounding the accident for a long time. While the suspicion of the accident has been present for a long time, it was only with review and reflection in preparing for arbitration that it became apparent that the mechanism of the accident itself, and the subsequent reliance upon it by Ms. Ogboe would be a principal issue in this arbitration.

Notwithstanding the delay in raising the issue, it is clear now that there is a fundamental difference of opinion as to what took place on June 27, 2010. It is also clear that TD dragged its feet and was exceptionally late in bringing forward the issue of material misrepresentation and the allegedly fraudulent accident.

Guidance as to adjournments at the Commission is provided by Practice Note 9 and Rule 72 of the Dispute Resolution Practice Code. They are subject to the discretion of the arbitrator guided by the principles of fairness and timeliness as interpreted by the courts.

Practice Note 9 states that adjournments will only be considered in three circumstances: in cases of personal emergencies, such as serious illnesses or deaths in the family, for valid reasons relating to the hearing itself, such as an imminent settlement, or medical or other critical evidence that is unavoidably delayed, and when a lawyer is involved in a trial or other proceeding that was scheduled to conclude before the start the arbitration.

Essentially the view taken by the Practice Code is that adjournments should be rarely granted, only in extraordinary circumstances and the dates fixed on consent for arbitrations should be almost universally honoured.

Both the reality of practice and directives from the courts have served to temper the approach set out in the Code.

In Certas Direct Insurance Co. v. Gonsalves², the Divisional Court found that the doctrine of fairness trumps the specific provisions of the Practice Code. Lederer J. stated:

Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.

Lederer J. continued:

The arbitrator had a wide discretion to ensure a fair hearing. Neither the Dispute Resolution Practice Code, first edition updated October 2003, (the “Code”) nor Practice Note 9 can interfere with that overarching responsibility. Although the arbitrator did not specifically refer to the provisions of the Code or Practice Note 9, the finding of fact by the arbitrator was sufficient to explain why those provisions were not germane to the issue she was deciding.

The nature of the discretion that should be applied to adjournments is summarized as the comments of Laskin, J. in Khimji v. Dhanani:³

Under our modern Rules non-compensable prejudice plays a pivotal role in deciding whether to grant an amendment or an adjournment. For example, under Rule 26.01 a court shall (not may) grant leave to amend a pleading “at any stage of an action” - on the eve of or even during a trial – “unless prejudice would result that could not be compensated for by costs or an adjournment.” Here, the prejudice to Mr. Khimji from the denial of an adjournment is obvious: his action was dismissed without an adjudication on its merits.

I accept that TD has now raised (if tardily) a serious preliminary issue as to whether those who claimed to be passengers in the vehicle were indeed involved in an accident, an event that is at the basis of this accident benefit claim.

It is also clear that the allegations raised by TD would apply equally to the other passengers said to be in the vehicle at the same time, and who have advanced claims.

TD requests the consolidation of the three arbitration files in which the same issue has been raised.

I accept TD’s suggestion that there is a risk of diverging and contradictory findings if these three matters involving the same fact situation are heard separately.

Differing findings as to the mechanism of the accident, and the involvement of certain persons in arranging or not the circumstances of an accident would not only potentially cause confusion, but would risk bringing the arbitration process into disrepute.

It is clear however from Mr. Wolf’s letter that he believed that due to the late timing of this adjournment request and the likely delays that will entail if it is granted, his client will be prejudiced.

Mr. Wolf also pointed to TD’s claimed failure to file its documents in a timely matter. If an adjournment gave TD the opportunity to cure this defect, then a potential advantage to Ms. Ogboe would be lost.

There is however an adjournment request in place. If I were to strictly follow Practice Note 9, which sets out Commission policy on adjournments, as urged by Mr. Wolf, the balance would likely be in favour of proceeding to the current hearing dates.

Given, however the Divisional Court’s approach to the Practice Note in Gonsalves, and the jurisprudence arising from Kalin v. Ontario College of Teachers⁴), I am reluctant to refuse a reasonable adjournment request where the prejudice to Ms. Ogboe of a delayed hearing might well be addressed by an order of costs or some other condition on the arbitration.

As Laskin, J.A., stated in Khimji: “Under our modern Rules non-compensable prejudice plays a pivotal role in deciding whether to grant an amendment or an adjournment.”

While I recognise that Ms. Ogboe is impatient with the slow pace of this arbitration and may suffer economic consequences if this matter is delayed too long, that is precisely the sort of prejudice that can potentially be addressed by terms such as an expense order or even interim benefits.

Another element to be taken into consideration is that there would appear to be insufficient time currently scheduled to deal with both the substantive issues contained in the pre-hearing letter and the preliminary issue now being raised.

At the intitial contact with the parties I found that it was necessary to adjourn this matter, subject to appropriate conditions to address the prejudice alleged by Ms. Ogboe, arising from the failure to proceed on April 29 and the rather late change of course by TD.

An adjournment order was issued on April 11, 2013. However, I reserved on any conditions to allow the parties to make submissions as to their nature and degree, which have now been provided.

Essentially Ms. Ogboe wanted payment for her expenses thrown away by the last minute adjournment, together with certain orders to avoid related to the filing of reports to avoid giving the Insurer the advantage of an adjournment to remedy filing defaults related to the original hearing date.

Counsel for TD conceded that an expense order might well be appropriate given the lateness of the adjournment request, but disagreed as to the amount requested by counsel for Ms. Ogboe.

It is clear from a review of the file that TD was aware of the allegedly suspicious elements of the motor vehicle accident for a considerable time, likely before the pre-hearing when the arbitration date was set.

Thus, sitting on some serious allegations until virtually the eve of the hearing not only made it difficult for Ms. Ogboe to respond to them, but almost certainly necessitated an adjournment.

Although I accept that the allegations made against Ms. Ogboe are likely not frivolous and are made in good faith, the timing of the adjournment request necessarily delayed the arbitration, and consequently properly attracts an award of expenses. That much is conceded by TD.

Regulation 664 provides inter alia that an arbitrator may order expenses where “The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.” I find that TD’s conduct meets this criterion for an order of expenses.

Ms. Ogboe has requested some $5000 in expenses as costs thrown away. Given that her counsel had prepared for a substantive hearing on the issues of attendant care, caregiver, housekeeping, and medical benefits, and will now likely be faced with a preliminary issue hearing as to whether there indeed was an accident, counsel’s argument that costs would indeed be thrown away rings true.

By the time this now-complex matter makes its way through the hearing process, it is self-evident that witnesses will have to be re-interviewed and re-prepared, and most current hearing preparation thrown away.

In that context I accept that the amount claimed is a reasonable (and possibly a modest) amount and consequently order that TD pay to Ms. Ogboe her costs thrown away in this adjournment which I fix at $5000 inclusive of HST.

Given the inexcusably late timing of the new issues, I will make the expense order payable forthwith in any event of the cause.

In order to prevent any potential abuse of the adjournment process, I will also order that the parties may not file any further evidence without leave of an arbitrator. While I anticipate that a case will likely be made for further evidence related to the “accident” allegations, I would approach with caution any request to file further evidence or call further witnesses with regard to the issues already in dispute at the adjourned arbitration.

Any new arbitration dates will be peremptory to TD.

Although this matter is adjourned sine die, I order that it be case managed in common with the other arbitrations relating to the other passengers in the motor vehicle in question, pending any formal order as to the consolidation of these arbitrations.

As part of that case management I have already advised the parties that in all likelihood this matter will proceed to a joint preliminary issue hearing on the issue of whether there was an accident as defined in the Schedule.

The other claimed occupants of the vehicle who have filed applications for arbitration have been put on notice of TD’s position and its request to consolidate all related claims.

May 31, 2013

John Wilson Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2013 ONFSCDRS 68 FSCO A12-000697

BETWEEN:

HELEN OGBOE Applicant

and

TD GENERAL INSURANCE COMPANY Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The arbitration hearing shall be adjourned sine die to t allow the question of consolidation of the three claims to proceed.
2. The parties shall not file any further evidence without leave of an arbitrator.
3. The adjournment date, when fixed, shall be peremptory to TD.
4. TD shall pay Ms. Ogboe`s expenses thrown away by the last minute adjournment which are fixed at $5000, payable forthwith in any event of the cause.

May 31, 2013

John Wilson Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 22011 ONSC 3986, [2011] O.J. No. 3290
3. 32004 CanLII 12037 (ON CA), 69 O.R. (3d) 790
4. 4(2005 CanLII 18286 (ON SCDC), 75 O.R. (3d) 523