Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2014 ONFSCDRS 133
Appeals P14-00022A and P14-00022C
OFFICE OF THE DIRECTOR OF ARBITRATIONS
JAROMIR “MIKE” KOZUMPLIK
Appellant / Cross-Respondent
and
AVIVA CANADA INC.
Respondent / Cross-Appellant
BEFORE:
Delegate Lawrence Blackman
REPRESENTATIVES:
Ms. Leanne Storms for Aviva Canada Inc.
Mr. Douglas M. Bryce for Mr. Kozumplik
HEARING DATE:
By written submissions due August 12, 2014 (Order issued August 13, 2014)
PRELIMINARY APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Aviva Canada Inc.’s cross appeal is not rejected pursuant to Rule 51.2(a) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014).
The time lines for written submissions in these appeals are set out within.
The legal expenses of this preliminary issue appeal decision are deferred to the conclusion of this appeal, subject to any further or other order of an appellate officer.
August 15, 2014
Lawrence Blackman Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL AND BACKGROUND
This preliminary appeal decision pertains to whether the cross-appeal of Aviva Canada Inc. (“Aviva”) is out of time and, if so, whether the cross-appeal should be rejected under Rule 51.2(a) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”), or whether the time for delivering the cross-appeal should be extended under Rule 52.2.
Mr. Kozumplik was injured in an August 29, 2004 motor vehicle accident. As a result, he sought statutory accident benefits under the 1996 Schedule1 from Aviva, his first-party automobile insurer. In February 2014 the parties came before Arbitrator Henry (the “Arbitrator”) regarding an income replacement benefits (“IRBs”) dispute. The Arbitrator’s May 9, 2014 decision held:
Mr. Kozumplik is entitled to an income replacement benefit at the rate of $273.68 per week from August 29, 2006 to June 25, 2013, less 80 per cent of his net income as set out in his income tax returns, plus the prescribed interest.
Aviva’s June 10, 2014 e-mail sought clarification from the Arbitrator whether he was referring to all of Mr. Kozumplik’s income tax returns, including his personal and corporate tax returns and financial statements, as well as seeking clarification whether any further IRBs were owed.
In the interim, Mr. Kozumplik delivered his June 6, 2014 Notice of Appeal. Mr. Kozumplik submits that the Arbitrator erred in law in ordering that his IRBs be reduced by 80% of his net income set out in his income tax returns. Mr. Kozumplik argues, in part, that as he is suffering a complete inability to engage in any employment for which he is reasonably suited by education, training or experience, “anything reflected on his income tax returns does not and cannot constitute income received in respect of any employment.”
In response to the request for clarification, the Arbitrator wrote the parties on June 23, 2014:
… it was my intention that Mr. Kozumplik was entitled to post-accident income, as an Income Replacement Benefit, for the period from August 29, 2006 to June 25, 2013. The rate of income replacement was to be $273.68 per week, less 80% of his net self-employment income, plus the prescribed interest for that period of time, as set out in his personal income tax returns.
Aviva’s June 27, 2014 Response to Appeal stated that the parties had agreed at arbitration, in part, that Mr. Kozumplik met the post 104-week IRB entitlement test from August 29, 2006 to June 25, 2013. The only issue in dispute was the IRB quantum for that period, narrowed to whether Mr. Kozumplik was employed, as defined in the 1996 Schedule, during that time.
Aviva argues that if Mr. Kozumplik was determined to have been employed and earning post-accident income, then his correct IRB quantum was that set out in the reports of LBC International, which Aviva had paid. Aviva submits that the Arbitrator found that Mr. Kozumplik was employed and had earned employment income for the period in question, yet:
Despite these findings, the Arbitrator subsequently ruled that the calculation of Mr. Kozumplik’s post-accident income was to be made in [a] manner that was inconsistent with the agreements between the parties and the evidence before him. Aviva is cross-appealing from this portion of the Order …
The Commission received Aviva’s cross-appeal on June 27, 2014. Aviva argues that the Arbitrator erred in law, in part, in exceeding his jurisdiction by deciding an issue that, as per the parties’ agreement communicated to the Arbitrator, was not before him.
Mr. Kozumplik’s July 18, 2014 Response to the Cross-Appeal argues, in part, that Aviva’s cross-appeal is out of time. Rule 52.1 of the Code, he submits, required the cross-appeal to be filed by June 9, 2014, thirty days after the Arbitrator’s May 9, 2014 order. Aviva, however, filed its cross-appeal on June 27, 2014. Mr. Kozumplik further argues that the time for filing the cross-appeal should not be extended as Aviva requested clarification from the Arbitrator more than thirty days after the Arbitrator’s order and there are no reasonable grounds to grant an extension.
Aviva responds that its June 27, 2014 cross-appeal was not late as it was filed within thirty days of the Arbitrator’s June 23, 2014 clarification of his order. In the alternative, if its cross-appeal is late, it argues that there are legitimate grounds under Rule 52.2 for extending the time line.
II. ANALYSIS
Rule 56.5 of the Code allows an appeal to be decided in any manner considered appropriate. My July 25, 2014 letter stated that, subject to the parties’ submissions and any further material filed, the most expeditious, least costly and most just means of determining whether the cross-appeal should be rejected as being late was by written submissions. Neither party has requested an opportunity to provide oral submissions on the question of late delivery. I am, therefore, deciding this preliminary issue on the written submissions received.
Rule 51.2(a) of the Code provides that an appeal may be rejected if it is out of time. Rule 52.1 requires the appellant to file the Notice of Appeal within 30 days of the date of the arbitration order. This reiterates subsection 283(2) of the Insurance Act, R.S.O. 1990, c. I.8. Rule 55.1 of the Code states that if the respondent intends to appeal the arbitration order, a separate Notice of Appeal must be completed and the time periods for appeal apply.
Rule 65.6 of the Code provides that an “adjudicator may at any time clarify a decision or order that contains a misstatement, ambiguity or other similar error.”
The Arbitrator’s May 9, 2014 order deducted 80 per cent of Mr. Kozumplik’s net income as set out in his income tax returns. The Arbitrator’s June 23, 2014 order, in response to Aviva’s request for clarification, deducted 80% of Mr. Kozumplik’s net self-employment income as set out in Mr. Kozumplik’s personal income tax returns.
Rule 1.1 of the Code provides that these Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute. In this case, the Arbitrator amended his order for the stated purpose of clarification. In these circumstances, and to produce a just resolution, I find that the date of the order from which the thirty-day timeline to appeal runs is the Arbitrator’s June 23, 2014 order. As Aviva delivered its cross-appeal four days later, on June 27, 2014, I find that the cross-appeal is not out of time.
In any event, Rule 52.2 of the Code provides that the time for requesting an appeal may be extended on such terms as are considered appropriate, either before or after the thirty-day time limit, if there are reasonable grounds for granting the extension. This reiterates subsection 283(3) of the Insurance Act that further provides that the extension may be granted with such directions as are considered proper. Based on Rule 55.1 of the Code, this applies equally to cross-appeals.
Delegate McMahon, in Welsh and Economical Mutual Insurance Company, (FSCO P02-00024, April 23, 2003), confirmed the broad discretion to grant an extension of the time to file a Notice of Appeal, holding:
The expiry of the time for initiating an appeal is not determinative.
The major factor to be considered is the existence or absence of potential prejudice, that is, prejudice that cannot be addressed by expenses or other relief.
Other considerations are whether a question of law is raised, the length of the delay and any excuse for the delay.
The overriding principle is Rule 1.1 of the Code, that these Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.”
If the cross-appeal was delivered late, I find that there are reasonable grounds for extending the time for filing the cross-appeal:
(a) Any delay was relatively short, being less than three weeks after the thirty-day due date from the Arbitrator’s initial May 9, 2014 order.
(b) Aviva has provided a reasonable explanation for any delay, namely that it sought clarification of the Arbitrator’s order and that it filed its cross-appeal four days after the Arbitrator clarified his order.
(c) There is no prejudice to Mr. Kozumplik if the time for delivering a cross-appeal is extended that cannot be compensated by expenses or other relief. Mr. Kozumplik does not argue otherwise. There is prejudice to Aviva that cannot be addressed by expenses or other relief if this appeal is rejected. Mr. Kozumplik did not seek any conditions should the time for delivering the cross-appeal be extended.
(d) My July 3, 2014 letter notified the parties of my intention to combine these appeals (subject to Rule 51.2 being raised as a preliminary issue) as (1) the appeals had an issue or question of law, fact or policy in common, (2) arose from the same arbitration decision and (3) the application of the Rule would result in the most just, quickest and least expensive means to deal with the appeals.
My letter noted Rule 30.2 of the Code, that where a party objects to the notice of intention to combine proceedings, the party must promptly notify this office and the other party, in writing, of the objection. Neither party has objected to combining these appeals, should the cross-appeal not be rejected.
Rather, the August 12, 2014 e-mail of Mr. Kozumplik’s counsel’s office requested confirmation, as counsel would be away from the office, that my previously set August 22, 2014 deadline for Mr. Kozumplik’s written submissions in his appeal was suspended and that a new time line would be set when this preliminary appeal decision was rendered.
Accordingly, I am not rejecting Aviva’s cross appeal under Rule 51.2(a) of the Code. Rather, I am combining these appeals, which will proceed together and will be heard at the same time. I am setting the following time lines for written submissions in both appeals:
Adapting the thirty-day time line from Rule 54.1 of the Code, Mr. Kozumplik shall, by Thursday, September 18, 2014, serve Aviva and file (with a Statement of Service in Form F) with this office his written submissions on his appeal. Likewise, Aviva shall, by September 18, 2014, serve Mr. Kozumplik and file (with a Statement of Service) with this office its written submissions on its cross-appeal.
Following Rule 54.3 of the Code, both parties shall, by Wednesday, October 8, 2014, serve on the other party and file (with a Statement of Service) with this office their responding written submissions to the other party’s written appeal submissions.
Both parties shall, by Thursday, October 23, 2014, serve and file any reply submissions in their respective appeals.
III. EXPENSES
The legal expenses of this preliminary issue appeal decision are deferred to the conclusion of these appeals, subject to any further or other order of an appellate officer.
August 15, 2014
Lawrence Blackman Director’s Delegate
Date