Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2014 ONFSCDRS 137 Appeal: P14-00020

OFFICE OF THE DIRECTOR OF ARBITRATIONS

NORTHBRIDGE COMMERCIAL INSURANCE CORPORATION Appellant

and

BEANT GILL Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. J. Claude Blouin for the Appellant, Northbridge Commercial Insurance Corporation Mr. Salman Tariq for the Respondent, Mr. Gill

HEARING DATE: August 15, 2014

PRELIMINARY APPEAL ORDER

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

Pursuant to Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated January 2014), on the terms set out within (including the matter being remitted to the Commission’s Arbitration Unit for an expedited rehearing), I reject this appeal from the Arbitrator’s May 12, 2014 decision on a preliminary issue. This is without prejudice to either party appealing any further first-level decision on whether Mr. Gill was injured as a result of an accident, as defined in the Schedule.
Each party will bear its own legal expenses of this appeal.

August 20, 2014

Lawrence Blackman Director’s Delegate Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

On February 27, 2014, the parties attended before Arbitrator Pepper (the “Arbitrator”), of ADR Chambers, for a determination of the motion brought by the Appellant, Northbridge Commercial Insurance Corporation, for an order that the Respondent, Mr. Beant Gill, had not sustained an impairment as a result of an “accident,” as defined in subsection 2(1) of the 1996 Schedule.¹

The Arbitrator’s May 12, 2014 decision on a preliminary issue did not answer the question before him. Rather, the Arbitrator found that there was “a genuine issue for hearing as to whether Mr. Gill was injured as a result of an ‘accident,’” and dismissed the Appellant’s motion.

Rule 20.04(1)(a) of the Rules of Civil Procedure provides, in part, that the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial with respect to a claim or defence. This Commission, including proceedings sent to ADR Chambers, is not subject to the Rules of Civil Procedure. Rather, the Commission, including ADR Chambers, is subject to the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”).

The Code does not have a provision for summary judgment on the basis of whether there is a genuine issue requiring a trial. Rule 68.1 of the Code provides that, subject to the notice safeguards of Rule 68.2, an adjudicator may dismiss a proceeding without a hearing where the proceeding is frivolous, vexatious or is commenced in bad faith. That is not pleaded in this case.

The Commission has developed a practical usage of preliminary issue hearings where the determination of a discrete issue may resolve, or at least significantly narrow, the larger dispute. Examples of preliminary hearing issues are limitation provisions and determinations of catastrophic impairment. A common preliminary hearing issue is the threshold question of whether the insured person sustained an impairment as a result of an accident, as defined.

The Respondent was involved in a road incident on May 13, 2010. He applied to the Appellant for first-party statutory accident benefits available under the 1996 Schedule. The Appellant denied payment of benefits. Mediation failed to resolve this dispute. The Respondent applied for arbitration. The Appellant moved for a preliminary issue determination that the Respondent had not sustained an impairment as a result of an accident.

The Arbitrator stated there was no dispute the Respondent had suffered several impairments as a result of the May 13, 2010 incident. The Appellant argued that the direct cause of the Respondent’s injuries was rubber bullets shot by police in Monroe County, Wisconsin, who in the words of the Arbitrator “seem to have mistakenly determined that the truck [driven by the Respondent] was stolen and became concerned that the truck might contain explosives.”

The Arbitrator, applying Amos v. Insurance Corp. of British Columbia 1995 CanLII 66 (SCC), [1995] 3 S.C.R., 405, held that the shooting of the Respondent “was not random, but arose out of his use or operation of an automobile. Indeed, it was Mr. Gill’s erratic operation of his truck, and his failure to stop, that likely led police to shoot rubber bullets at the [Appellant].”

The Arbitrator reviewed Martin v. 2064324 Ontario Inc. (Freeze Night Club., 2013 ONCA 19, where the defendant had brought a court motion for summary judgment, asserting there was no issue requiring a trial. On appeal, the Court of Appeal determined, with one exception, that the use or operation of Mr. Martin’s vehicle could not be said to have directly caused his injuries. Forcibly placing a person into the trunk of a car was not in the “ordinary course of things” associated with the use or operation of a vehicle.

The Court of Appeal directed that there was a genuine issue for trial of whether the assailants drove over Mr. Martin’s right foot inadvertently or deliberately. If deliberate, it could be open to the defendant to argue there was an intervening intentional tort falling outside the reach of the “ordinary course of things” associated with the use or operation of a vehicle. It might also be a defence that the renewed theft of the vehicle was an intervening event breaking the chain of causation between the use or operation of the vehicle and the foot injury.

The Arbitrator held that he had “some difficulty applying the modified test to the present case, given the state of the record and the absence of medical or other expert evidence from either side as to the likely cause of the [Respondent’s] psychotic and manic-depressive incident.” He held that “additional evidence is required at the hearing in order to properly assess whether the shooting under these unique factual circumstances was an intervening event or in the ordinary course of things, given the [Respondent’s] erratic and dangerous driving.”

The May 16, 2014 Notice of Appeal asked, in part, that the Appellant be permitted to appeal the Arbitrator’s order on a preliminary issue. The form of the Notice of Appeal states that the reasons for the request should be as complete as possible. The Appellant simply submitted that “the determination of whether Mr. Gill’s impairment arose out of an ‘accident’ will finally determine the issues between the parties.”

My May 22, 2014 acknowledgment letter confirmed that Rule 50.2 of 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) provides that such an appeal may be rejected. Delegate Makepeace, in Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), held that the purpose of the present Rule 50.2 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.

I provided the Appellant an opportunity to deliver further submissions on why this appeal should be accepted at this time.

The Appellant’s May 27, 2014 letter argued that accepting this appeal “would produce the quickest, most just and least expensive resolution of the dispute between the parties.” If the Respondent’s impairment did not arise out of an accident, “that should be the end of the matter.” The alternative, it argued, was to force the matter to a full hearing that would take place some five years post-incident. The Appellant submitted that nothing has happened in the proceeding other than the preliminary issue hearing; that we “have been attempting to get this matter on for a pre-hearing for approximately two years, without success.”

The Respondent, who was represented at arbitration, was initially self-represented in this appeal. I provided him until June 27, 2014 to deliver his Response to Appeal with written submissions on whether this appeal should be accepted. As the Respondent was self-represented and had required an interpreter at arbitration, I arranged a July 29, 2014 oral hearing with a translator on the preliminary appeal issue of whether to accept the appeal.

On June 27, 2014, this office was advised the Respondent had retained legal representation. I extended the time for delivery of the Response to Appeal to July 21, 2014 and adjourned oral submissions to August 15, 2014.

The Respondent submits that even if the Arbitrator applied the wrong test, “it is reasonable to conclude that Mr. Gill’s case falls within the definition of ‘accident.’”

II. ANALYSIS

Preliminary issue hearings are intended to be an innovative, proportionate, expeditious and less expensive means of adjudication. They are an opportunity for adjudicators to make necessary findings of fact and apply the law to the facts on discrete issues that have the potential of at least narrowing the entire, broader proceeding, if not making a full hearing moot.

Preliminary issue hearings are consistent with and, indeed, a precursor, to the Supreme Court of Canada’s intent in Hryniak v. Mauldin, 2014 SCC 7, of “promoting timely and affordable access to the civil justice system” by “simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case.”

Preliminary issue hearings are not a dress rehearsal for trial. They are not intended to be an additional, procedural, threshold step, at extra time, expense and delay to the parties.

Subsection 283(1) of the Insurance Act, R.S.O. 1990, c. I.8, limits appeals from the order of an arbitrator to questions of law. Housen v. Nikolaisen 2002 SCC 33, [2002] 2 SCR 235, held that “questions of law are questions about what the correct legal test is.”

The correct legal question before the Arbitrator was whether the Respondent had sustained an impairment as a result of an “accident,” as defined in subsection 2(1) of the 1996 Schedule. The Arbitrator answered a different question, whether there was a genuine issue for hearing as to whether the Respondent was injured as a result of an accident.

As stated in Torok, the exercise of the discretion under Rules 50.2 and 51.2(c) should produce the quickest, most just and least expensive resolution of the dispute. There is no sense in accepting this appeal and having full written and oral submissions to state, several months hence, the obvious, that the Arbitrator erred in law by applying the wrong legal test.

The more pertinent question is how is the Arbitrator’s error to be rectified? The Appellant asks that I review the documentary and oral record, make my own findings of fact and apply the law to those facts.

I decline to do so. Putting on the hat of a first-level adjudicator may arguably be the quickest and least expensive means of resolving this dispute. It would not be the most just.

Appeals is not a substitute for arbitration. Appeals are limited to determining whether the arbitrator has erred in law. No case law was provided as to the appropriateness of my hearing this matter not as an appellate officer but as a first-level adjudicator making fresh determinations. In this case, where the Arbitrator has failed to answer the question before him, the appropriate remedy is to return the matter for proper first-party adjudication, leaving appeals as a review body of the decision or decisions that may be forthcoming from arbitration.

The time lines set out in the Code state that mediation will be concluded within sixty days of the registration of the completed Application for Arbitration. The Appellant advises that mediation of the Respondent’s November 18, 2010 Application for Mediation was not held until May 4, 2012, a year and a half later.

Under the Code, pre-hearing discussion dates shall be available within six to eight weeks from the registration of a completed Application for Arbitration. The Commission registered the August 2, 2012 Application for Arbitration on August 13, 2012. On November 28, 2012, ADR Chambers confirmed an April 15, 2013 pre-hearing date, eight months after registration. That date was adjourned due to the Respondent’s change of representation. Shortly before the new pre-hearing date of August 26, 2013, the Respondent became self-represented.

Under section 33 of the Code, the purposes of a pre-hearing discussion include identifying and obtaining agreement as to the issues for arbitration, obtaining agreement as to facts, completing production exchange, identifying witnesses and dealing with any other matters that the arbitrator considers appropriate from arranging for an interpreter to determining preliminary issues.

It does not appear that a section 33 pre-hearing was held on August 26, 2013. Rather, ADR Chambers wrote that a preliminary issue hearing would be held on December 9, 2013 “to determine if Mr. Gill’s matter meets the definition of ‘Accident’ according to the [Schedule].”

On November 6, 2013, ADR Chambers received the Appellant’s October 31, 2013 Document Brief “in preparation for the preliminary issue hearing.” On December 6, 2013, ADR Chambers wrote the Appellant’s counsel that the Arbitrator wished to set up a case conference because he had not received any motion record and the Respondent continued to be unrepresented. It is not clear what case conference was held, but on December 13, 2013 ADR Chambers sent a notice of an arbitration preliminary hearing for February 27, 2014, now arranging for an interpreter.

On January 31, 2014, the Appellant confirmed it had delivered its December 13, 2013 letter and accompanying Motion Record, Factum and Book of Authorities to the Respondent by both ordinary and registered mail and to the Arbitrator by regular mail.

The preliminary issue, the hearing for which was initially arranged just short of a year ago, remains unanswered. Notwithstanding that the Application for Arbitration was registered some two years ago, it would appear that a pre-hearing conference under Rule 33 of the Code has never been held. Notwithstanding that it is coming up to four years since mediation was sought, basic documents such as the medical records from Wisconsin are not in the parties’ possession.

Without prejudice to either party to appeal any further decision on whether the Respondent was injured as a result of an accident, I reject this appeal from the Arbitrator’s May 12, 2014 decision on a preliminary issue that did not finally decide the issues or, in this case, any of the issues in dispute, on the following terms, as discussed and confirmed with the parties on August 15, 2014:

As agreed, each party shall within two weeks of August 15, 2014, deliver to the other party their production requests pertaining to the preliminary issue of whether Mr. Gill sustained an impairment as a result of an accident, as defined in the 1996 Schedule.
As the parties further agreed, within a further two weeks, that is by September 12, 2014, both parties shall have responded to any production requests by (1) signing the requested authorizations for the release of documentation from third parties, (2) providing either the documentation requested or proof of best efforts to obtain the documentation from third parties, and/or (3) explaining the basis for refusing to provide, request or assist in the obtaining of a document.
At the request of counsel and on the consent of both parties, this matter shall be sent to the Arbitration Unit of the Financial Services Commission of Ontario for an expedited pre-hearing discussion and an expedited hearing of the preliminary issue of whether Mr. Gill sustained an impairment as a result of an “accident,” as defined in the Schedule.

III. EXPENSES

Rule 75.2 of the Code sets out the criteria for determining entitlement to legal expenses. Neither party seeks its legal expenses of this appeal. In the circumstances specific to this case, I find it appropriate that each party should bear its own expenses of this appeal.