Thanikasalam v. State Farm Mutual Automobile Insurance Company, 2014 ONFSCDRS 113

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 113

FSCO A12-000791

BETWEEN:

VELLUPPILLAI THANIKASALAM

Applicant

and

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: John Wilson

Heard: November 16, 2013, at the offices of the Financial Services Commission of Ontario in Toronto

Appearances: David Carranza for Mr. Thanikasalam

Jonathan Schrieder for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Velluppillai Thanikasalam, was injured in a motor vehicle accident on October 26, 2008. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Thanikasalam applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Mr. Thanikasalam claimed for a variety of assessment expenses for services provided by Omni Evaluations but withdrew his claims for income replacement benefits, and housekeeping benefits at the pre-hearing which took place on December 10, 2012.

Among other matters addressed in the presence of Mr. Thanikasalam at the pre-hearing was the setting of dates for the arbitration hearing. That date was set for November 12, 2013.

On November 12, 2013 Mr. David Carranza attended for the Applicant, while Mr. Schrieder attended on behalf of State Farm. Mr. Thanikasalam did not attend.

Rather, Mr. Carranza presented a motion to be removed from the record as representative for Mr. Thanikasalam since he had been unsuccessful in contacting his client.

State Farm, in turn, requested that Mr. Thaniksalam’s claims be dismissed.

The issues in this hearing are:

Should Mr. Carranza be removed from the record as representative of Mr. Thanikasalam?
Should Mr. Thanikasalam’s claims be dismissed?

Result:

Mr. Thanikasalam’s claims are dismissed.
State Farm is entitled to its expenses in this matter.

EVIDENCE AND ANALYSIS:

In this case, by way of oral decision at the hearing, I found that by leaving a request to be removed from the file as representative for record until the hearing itself, with no extenuating circumstances, Mr. Carranza forfeited the right to be removed without appearing on behalf of his client at the hearing. I also ordered the dismissal of Mr. Thanikasalam’s claims due to his failure to attend the hearing and provide evidence in support of his claims.

The withdrawal of representatives of record involves: Rule 9.8 of the Dispute Resolution Practice Code, the Rules of Professional Conduct of the Law Society of Upper Canada and the common law and jurisprudence surrounding such withdrawals.

Rule 9.8 of the Code provides:

Where the party represented provides written consent to the representative’s request for withdrawal, the Registrar or an adjudicator shall permit the representative’s withdrawal. Otherwise, an adjudicator may permit the representative to withdraw, subject to such terms as the adjudicator considers just.

Although the Code explicitly sets out a procedure for the withdrawal of counsel, it only implicitly deals with an order that counsel remain as counsel or representative of record. It would make no sense however if the procedure under Rule 9.8 were an automatic rubber stamp, triggered only by a representative’s request to be removed from the record.

Rather such a request triggers the exercise of an adjudicator’s discretion to allow or not allow removal of a representative. Notwithstanding some jurisprudence to the contrary a court or an adjudicator has the discretion to refuse a representative’s request to be removed as solicitor from the record, but that discretion must be exercised sparingly and only when necessary to prevent serious harm to the administration of justice.²

While most jurisprudence relating to solicitors of record arises from the criminal courts, there is no reason that the fundamental principles in those cases may not be applied to civil matters. Fish, J.A., speaking for the Quebec Court of Appeal, considered some of the policy questions involved in the withdrawal of counsel during a proceeding:

Permission to withdraw at the outset or in the course of a trial is not lightly granted by the courts. Withdrawal will normally be permitted only where counsel and client are irreconcilable. So fundamental is the disagreement, that counsel is presumed incapable of properly representing the accused.³

Likewise in Ontario, the Courts have observed:

The mantle of solicitor of record may not be discarded except in accordance with the Rules of Civil Procedure. The client may deliver a notice of intention to act in person, pursuant to rule 15.03(3), or a notice of change of solicitors, pursuant to rule 15.03(1), or the solicitor of record may move under rule 15.04 for an order removing him as solicitor of record. Until a notice permitted by rule 15.03(1) or (3) is delivered, the responsibility remains with the solicitor of record. While the solicitor of record may expect to be served with one of the two notices, it is up to him to monitor the situation and, in the absence of such a notice, to move for an order in a timely fashion.⁴

The British Columbia Supreme Court decision of Justice McKay in R. v. Leask and Cronin⁵ provides some significant push-back to the idea that anyone can order counsel to remain on the record. In that matter, McKay J. expressed incredulity at the prospect of counsel being ordered to remain as counsel of record against his own wishes.

The issue is whether a trial judge has any right in law to order counsel to continue in the defence of an accused after counsel advises that he has decided that he will no longer represent the accused. In my view the law is clear that he cannot make such an order. I had never heard it suggested otherwise until I read the remarks of [Judge Cronin]. A judge [can], of course, urge counsel to reconsider and to try to reconcile any differences with his client -- but if counsel stands firm then he cannot be prevented from withdrawing. It follows that counsel cannot properly be cited for contempt for refusing to comply with that unlawful order.

In civil matters in Ontario, as opposed to criminal matters, Rule 2.09 of the Law Society’s Rules of Professional Conduct makes it clear that a lawyer may withdraw from representing a client for just cause. The rule includes as justifiable cause a loss of confidence, deception by the client, the failure to pay fees, or the refusal of a client to accept and act upon the lawyer’s advice on a significant point.

The Commentary on Rule 2.09 states:

No hard and fast rules can be laid down about what will constitute reasonable notice before withdrawal. Where the matter is covered by statutory provisions or rules of court, these will govern. In other situations, the governing principle is that the lawyer should protect the client's interests to the best of the lawyer's ability and should not desert the client at a critical stage of a matter or at a time when withdrawal would put the client in a position of disadvantage or peril.

Hill J. in R. v. Downey⁶ while accepting some elements of Leask, summarized the law in Ontario on the removal of counsel as follows:

A client can discharge counsel at any time and defend him or herself ... A lawyer, once retained, does not enjoy the same freedom of action.

Clearly counsel have an obligation to the tribunal and to the client to appear on a matter when they are counsel of record and not to abandon a cause or a client without proper notice and bona fide and reasonable grounds for such an action. As the time of the hearing nears, the burden on counsel seeking to be removed becomes even greater.

A judge or an adjudicator who has control of a process has authority to make an order that counsel remain on the record should counsel not satisfy the full criteria for removal including the bona fides of the counsel making the request.⁷

In this matter, letting Mr. Carranza off the record at the commencement of the hearing would potentially prejudice both his own client and State Farm. Although the representative alone is privy to the nature of his retainer and the discussions with his client, it would not be unrealistic to assume that Mr. Thanikasalam anticipated that Mr. Carranza would attend at this hearing and represent his interests unless discharged.

There is no evidence that Mr. Thanikasalam discharged Mr. Carranza, nor that he asked Mr. Carranza to do something or take a position in this matter that would run counter to propriety and professional good conduct. Rather, the information provided is that Mr. Thanikasalam is not returning his calls.

From State Farm’s point of view, the removal of counsel raised the risk of further delay and adjournments. It also had the potential of removing someone who could be found potentially responsible for the Insurer’s costs if Mr. Carranza’s retainer came into question.

In this case I found that by leaving a request to be removed from the file as representative for record until the hearing itself, with no extenuating circumstances, Mr. Carranza forfeited the right to be removed without appearing on behalf of his client at the hearing.

Assuming that Mr. Carranza had instructions to take this matter to the hearing, and did not remove himself in a timely manner, and in the absence of any evidence that Mr. Thanikasalam has rejected Mr. Carranza’s representation, the process was best served by continuing the hearing with Mr. Carranza representing his client’s interests.

Nor was I inclined to adjourn the hearing. The record clearly demonstrated that Mr. Thanikasalam had been provided with notice of the hearing, and no information was provided to excuse his non-attendance. Mr. Carranza, who was still the representative of record for Mr. Thanikasalam elected to call no evidence or witnesses.

The burden of proof in this matter rests with Mr. Thanikasalam. Consequently, in the absence of evidence, there was no basis to make any findings in favour of his claims for benefits.

State Farm asked that I dismiss Mr. Thanikasalam’s claim on the basis of his non-attendance and his failure to provide any evidence to support his claim, which I did orally at the time. Not having been provided with any request to re-open this matter in the interim, that dismissal is confirmed by the written order attached to these reasons.

EXPENSES:

While there are provisions in the Code for the holding of an expense hearing where parties cannot agree on costs, section 7(1) of the Statutory Powers Procedures Act provides:

Where notice of an oral hearing has been given to a party to a proceeding in accordance with this Act and the party does not attend at the hearing, the tribunal may proceed in the absence of the party and the party is not entitled to any further notice in the proceeding.

Patently, Mr. Thanikasalam did not appear for his arbitration hearing, did not provide any evidence in his favour and did not reply to communications from his representative. Consequently he has forfeited any right to further notice in the hearing process.

In both the Application for Arbitration and the Insurer’s Response, parties identified expenses as an issue in this arbitration. I find, therefore that I have jurisdiction to deal with the issue of expenses without further notice to Mr. Thanikasalam.

The Expense Regulation,⁸ which governs costs awards at FSCO sets out he following criteria for expenses:

12(1) The expenses set out in the Schedule are prescribed for the purpose of subsection 282 (11) of the Act. R.R.O. 1990, Reg. 664, s. 12.

(2) An arbitrator shall, under subsection 282 (11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

Each party’s degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
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.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation.
Whether the insured person refused or failed to submit to an examination as required under section 44 of Ontario Regulation 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010), made under the Act, or refused or failed to provide any material required to be provided under subsection 44 (9) of that regulation. O. Reg. 275/03, s. 4; O. Reg. 548/05, s. 1; O. Reg. 36/10, s. 2.

The most obvious criterion in this matter is success. Indeed State Farm could not have been more successful. While the jurisprudence at the Commission has suggested that costs do not always blindly follow the cause, in this matter I see no reason to deviate from that fundamental rule.

As well, the failure of Mr. Thanikasalam to withdraw his claim on a timely basis once he no longer intended to pursue it, led to this hearing and the unneeded expenditures in time and resources by those who had to prepare and attend.

Consequently I find it appropriate that State Farm’s costs be borne by Mr, Thanikasalam.

Since the quantum of expenses was not addressed at the hearing, I will ask that State Farm provide both Mr. Thanikasalam and me with an expense outline detailing what it is claiming as reasonable expenses, within 30 days. Should Mr. Thanikasalam wish to respond he shall have seven days from the date of receipt of the expense outline. After reviewing this document and any response I will proceed to fix an appropriate amount for expenses.

July 7, 2014

John Wilson

Arbitrator

Date