Hassan Id v. Unifund Assurance Company, 2014 ONFSCDRS 201

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2014 ONFSCDRS 201

Appeal P14-00014

OFFICE OF THE DIRECTOR OF ARBITRATIONS

HASSAN ID

Appellant

and

UNIFUND ASSURANCE COMPANY

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Mr. Sergio Grillone for the Appellant, Mr. Hassan Id

Ms. Sharla Bandoquillo for the Respondent, Unifund Assurance Company

HEARING DATE:

Oral Hearing October 23, 2014

Additional written submissions received November 24, 2014

APPEAL ORDER

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

1. This appeal is dismissed and the Arbitrator’s March 24, 2014 decision is confirmed.

2. Should the parties not agree on the legal expenses of this appeal, an appeal expense hearing shall be sought, as set out within, within forty-five days of the date of this decision.

December 23, 2014

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

In his March 24, 2014 decision on a preliminary issue, Arbitrator Mutch (the “Arbitrator”) found that the Appellant, Mr. Hassan Id, was not involved in an accident, as defined by subsection 2(1) of the 1996 Schedule.¹

The Respondent, Unifund Assurance Company, not objecting, my May 16, 2014 letter decision exercised my discretion under Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”) to accept this appeal from a preliminary arbitration decision.

The Notice of Appeal submits that the Arbitrator erred in law “by failing to properly balance the weight to be given to direct and indirect evidence and in doing so he failed to appreciate the Appellant’s burden of proof.”

This case rests on credibility. The Arbitrator, unlike myself, had the benefit of seeing and hearing the witnesses, including the Appellant. His reasons refer to the principal evidence he relied upon and provide a justification for his conclusions regarding credibility. Subsection 283(1) of the Insurance Act, R.S.O. 1990, c. I.8, restricts appeals from the order of an arbitrator to questions of law. I am not persuaded that the Arbitrator erred in law in his decision. I confirm the Arbitrator’s March 24, 2014 decision and dismiss this appeal.

II. BACKGROUND

Entitlement to benefits under the 1996 Schedule requires that the insured person sustain an impairment as a result of an accident. Subsection 2(1) defines an accident as:

… an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device;

The incident in question took place on June 21, 2010. The Arbitrator stated it was undisputed that the van in which the Appellant claims to have been seated was struck in the rear by a car driven by a 14 year old youth. The van was parked in front of a business, JFS Restaurant Equipment (“JFS”). It was also not disputed that as a result of the collision the van was pushed forward striking a concrete wall.

Five witnesses testified at the December 16, 2013 arbitration hearing. The Arbitrator stated at paragraph 11 of his decision that three witnesses testified the Appellant was occupying the van at the time of impact. These were the Appellant, his friend, Mr. S. Mohammed, the owner of the van, and another friend, Mr. D. Dorre. The two friends also alleged that they were in the van. At paragraph 12, the Arbitrator stated that two other witnesses, Ms. B. Spyropoulos, a co-owner of JFS, and Constable R. Singh, alleged the Appellant was not in the van at the time of impact.

The Arbitrator found the evidence of the three alleged occupants of the van substantially inconsistent regarding the events leading up to the impact as well as in conflict with their prior statements and the evidence of Ms. Spyropoulos and P.C. Singh.

III. THE APPELLANT’S SUBMISSIONS

The Appellant submits:

1. The Arbitrator erred in finding that P.C. Singh and Ms. Spyropoulos testified the Appellant was not in the van at the time of impact. Rather, P.C. Singh’s post-accident investigation notes speak to the activities of Mr. Mohammed, not the Appellant. Ms. Spyropoulos came out of her office eleven seconds after the sound of the impact.

Accordingly, neither P.C. Singh nor Ms. Spyropoulos saw the collision and neither was in a position to say that an accident, as defined, did not take place.

The Appellant submits that the decision in Certas Direct Insurance Company and Kwatemaa, (FSCO P06-00022, February 28, 2008), is instructive. In that case, it was found that the arbitrator did not err in relying on the insured’s evidence rather than on the theories of the insurer’s witnesses who claimed the accident was staged.

2. The Arbitrator accepted indirect evidence from witnesses who did not actually see the collision over direct evidence from those involved in the collision. In so doing, it is submitted, he made a legal, not a factual, error by giving more weight to indirect, opinion evidence over direct evidence. Further, based on the totality of the evidence before him, the Arbitrator erred in law by failing to properly weigh all of the evidence before him.

The definition of “accident,” it is submitted, does not contemplate pre-accident or post-accident events. The Appellant cites Arbitrator Miller, in Adusei-Peasah and TTC Insurance Company Limited, (FSCO A05-000865, February 2, 2007), who stated:

… where there are inconsistencies and contradictions in the evidence, the adjudicator must decide when weighing and balancing the evidence, whether these inconsistences and contradictions impugn the substantial and material elements of the claim being made, or are merely minor in nature.

In Wootton and TTC Insurance Company Limited, (FSCO A03-000002, October 27, 2005), Arbitrator Leitch found that although there were inconsistencies in the events leading up to and following the accident, “the critical evidence was that which explained how [the applicant] was injured.”

The Appellant submits that unlike Adusei-Peasah where there were also inconsistent statements regarding the events leading up to the collision, the Arbitrator failed to consider that the Appellant was consistent at all times in his evidence that he was involved in the collision, evidence verified by two other witnesses.

Similar to Wootton, the Appellant’s evidence, it is submitted, was consistent on how the collision took place and how he was injured, that the vehicle was rear ended and pushed into a concrete wall. The Arbitrator erred in law, it is argued, in failing to consider all of the consistent statements and in failing to properly apply the Appellant’s direct testimony to the legislative definition of accident in the 1996 Schedule.

3. There was no evidence to suggest that the Appellant was not in the collision. Rather, it appears that the Arbitrator relied on conjecture or speculation in this regard.

Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO P01-00022, February 26, 2003) and Liberty Mutual Insurance Company and Young, (FSCO P03-00043, June 20, 2005), upheld on judicial review by the Divisional Court, 2006 CanLII 7286 (ON SCDC), held that inferences must be carefully distinguished from conjecture or speculation. Findings of fact based on conjecture, or an error in the inference drawing process itself, constitute errors of law.

The Appellant cites the dictionary definition from Merriam-Webster that an inference is “the act or process of reaching a conclusion about something from known facts or evidence.”

The Arbitrator failed, it is submitted, to even find as an inference that the Appellant was not in the van at the time of impact. The Arbitrator should have stated the inference that timing was problematic and that it was unlikely that three people raced out of the van immediately so that within eleven seconds of impact, no one was there. However, the Arbitrator simply converted an allegation into evidence, leaving us scratching our heads, how did he get there?

It is submitted that in any event there are no established facts from which the inference could be made that the Appellant was not in the van at the time of impact. For such an inference to be valid, it is mandatory there be a witness who actually saw the impact, not evidence as to what happened before or after impact.

Accordingly, the Arbitrator’s decision is based simply on conjecture. How long the Appellant and his two friends stayed in the vehicle after impact, from a legal and foundational stand point, is a “red herring.”

In oral submissions, the Appellant agreed with the Respondent that if this appeal were allowed, the matter would have to return to arbitration for a new hearing.

IV. THE RESPONDENT’S SUBMISSIONS

The Respondent argues that the Appellant’s grounds of appeal concern the Arbitrator’s weighing of the evidence and his findings of fact, not errors of law. There is no statute or jurisprudence supporting the Appellant’s assertion that the “weighing of evidence is not a factual error but a legal error.” The Arbitrator, it submits, properly exercised his authority in weighing the evidence and making findings of fact. Accordingly, as appeals from arbitrators’ decisions are restricted to questions of law, there is no basis for interfering with the Arbitrator’s evaluation of the evidence. Therefore, this appeal should be dismissed.

Initially, the Respondent, citing Director Sachs in Shelley L.P. and Royal Insurance Company of Canada, (OIC P-002235, May 5, 1997), argued it was settled law that an appellate officer’s duty “encompasses a complete review of the documentary evidence and hearing record to ensure the arbitrator’s conclusions have a proper foundation – that is, they have sufficient evidence to support them.” The opposing Appellant’s oral submissions relied foremost on this citation in arguing that whether there is a sufficient factual foundation is always a question of law.

The Respondent subsequently argued that Shelley L.P. had been overruled. It now relies on the distinction made by Delegate McMahon in Lombardi, cited above, between there being no evidence in support of a decision, which is an error of law, versus a mere insufficiency of evidence, which is not reviewable.

The Respondent cites Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, that “an appeal is not a retrial of a case.” It submits that the Arbitrator had the advantage of observing and hearing the witnesses in person and considering their credibility in the context of the evidence as a whole.

Citing Khanna and Co-operators General Insurance Company, (OIC P96-00083, February 26, 1998), and Kasap and Allstate Insurance Company of Canada, (OIC P96-00071, March 13, 1998), the Respondent argues it is not the role of an appellate officer to second-guess an arbitrator’s assessment of the evidence or substitute his or her own view of the weight to be attributed to it. Whether an appellate officer might have come to a different conclusion on a particular issue or piece of evidence is not the test.

The Respondent submits that, in any event, the Arbitrator’s conclusions have a proper foundation with sufficient supporting evidence. More particularly, the Respondent argues:

1. The evidence regarding the events leading up to and after the incident was relevant, especially as credibility was a key factor in this case. In Adusei-Peasah, Arbitrator Miller acknowledged her reliance on evidence relevant to the accident as well as its aftermath.

2. The burden of proof is not discharged, where credibility is a key factor, by the Appellant simply asserting he was in the vehicle at the time of the collision. If that was the case, the hearing would be rendered moot.

3. The Arbitrator considered the consistent statements of the Appellant’s witnesses, as well as those that were inconsistent. The Arbitrator rejected the passage of time as explaining the Appellant’s inconsistencies in his evidence on the basis that three and a half years “should not change the alleged occupants’ recollections to such a degree.”

4. That the Appellant was not in the vehicle at the time of impact was properly deduced from objective, positive facts that (1) Ms. Spyropoulos immediately went to investigate and saw no one in the van or in the area other than the youth in the other car; and, (2) Mr. Mohammed failed to report that anyone was in the van, signing a statement that he was on the other side of the plaza when the impact occurred. The only logical conclusion was that there was no one in the van at the time of impact.

The Respondent’s written submissions, in addition to asking that the appeal be dismissed, sought an appellate order that it “is entitled to pursue its claim against the Appellant under section 47 of the Schedule for a repayment of the benefits paid.” At the oral hearing the Respondent withdrew this request, noting its intention of putting this question to the Arbitrator.

VII. ANALYSIS

The underlying, fundamental question in this case is whether the Appellant, himself, is entitled to claim first-party statutory accident benefits under the Schedule from the Respondent on the requisite basis that he sustained an impairment directly caused by the use or operation of an automobile. In this case, there is no issue that there was a collision. The narrower issue before the Arbitrator was whether the Appellant was in the van when it was struck by another vehicle.

The Arbitrator held:

The Applicant has the burden of proof. He must demonstrate, on a balance of probabilities, that it is more likely than not that he was involved in an incident in which the use or operation of an automobile directly caused an impairment.

The Appellant agreed in oral submissions that he had the onus of proof of establishing that he was in the van at the time of impact.

Kanareitsev v. TTC Insurance Company Limited, 2008 CanLII 26262 (ON SCDC), held:

Particularly when results turn on the first instance decision maker’s view of the credibility of witnesses and involves a fact-driven analysis, appellate review must take “proper account of the distinct advantage” of the first-instance decision maker’s assess­ments. The appeal judge must not try the case de novo or simply substitute his or her views for those of the trial judge ...

The nature of the proceedings was highly fact-intensive. There was a significant amount of documentary evidence tendered, and a number of witnesses testified. The credibility and reliability of the evidence were very much in issue, and the arbitrator was charged with the responsibility of determining these issues.

The Arbitrator’s decision reviewed much of the evidence that had been placed before her and offered conclusions as to which evidence she accepted and why. In our view, it was well-reasoned and addressed the factors relevant to the issue in dispute. While she may not have engaged in a detailed analysis of each and every aspect of the major points in issue, her reasons refer to the principal evidence she relied upon and provide a justification for her conclusions.

As noted, the Insurance Act restricts appeals from the order of an arbitrator to questions of law. Delegate Evans, in Young referencing Delegate McMahon’s decision in Lombardi, stated:

… errors of law include findings of fact made in the complete absence of supporting evidence, made on the basis of conjecture, or made on the basis of a misapprehension of the evidence caused by a misdirection on a legal principle. The vital distinction is between a conclusion that there was “no evidence” to support a finding and a mere “insufficiency of evidence.”

I agree. The statement in Shelley L.P. that an appellate officer’s duty encompasses ensuring that the arbitrator’s conclusions have sufficient evidence to support them is more reflective of the Insurance Act prior to 1996 when appeals from the order of an arbitrator could be brought on questions of fact as well as law.

As in Kanareitsev, the result in this case turns on the first instance decision maker’s view of the credibility of witnesses and involves a fact-driven analysis. Accordingly, the appellate review must take “proper account of the distinct advantage” of the first-instance decision maker’s assess­ments. I must not try the case de novo or simply substitute my views for those of the first-instance decision maker.

The Arbitrator does state, at paragraph 12 of his decision, that two witnesses, Ms. Spyropoulos and P.C. Singh, both alleged that the Appellant was not occupying the van at the time of impact. However, as the Arbitrator states at paragraph 30, neither Ms. Spyropoulos nor P.C. Singh saw the collision. Accordingly, neither could testify as to the time of impact.

I am not persuaded that the Arbitrator misspeaking at paragraph 12, corrected at paragraph 30 of his decision, is a basis upon which to return this matter to a new arbitration hearing. Rather, as in Kanareitsev, the Arbitrator’s decision went on to review much of the evidence that had been placed before him. The evidence before the Arbitrator included:

(1) Ms. Spyropoulos testified she was at work at JFS when she heard a bang. She immediately went to investigate, not taking more than eleven seconds to exit the store. She saw two vehicles, the van and a car with “a kid” in the driver’s seat clutching the steering wheel.

The Appellant and his two friends testified there were lots of people around the van.

Mr. Dorre stated there were more than 50 people. The Appellant testified both in chief (at page 16 of the transcript) and in cross-examination (at page 43) that he stayed in the van two or three minutes before getting out. Mr. Mohammed, at page 71 of the transcript, during cross-examination, stated that it could have been one or two minutes after impact that he left

the vehicle. Mr. Dorre, at page 106, also on cross-examination, stated that he stayed at the accident scene for “around 15 to 20 minutes.”

Ms. Spyropoulos, however testified that she saw no one in the van or in the vicinity until, in the Arbitrator’s words, “a woman she took to be the driver’s mother” exited a restaurant and headed towards the car, followed by ‘two or three guys.’” Subsequently, she saw a man walking towards her who identified himself as the owner of the van. The man was “perfectly fluent” in English. Mr. Mohammed, the van owner, testified that no one came out of JFS after the impact.

The Arbitrator found no reason to doubt Ms. Spyropoulos’ testimony that she immediately went to investigate the source of the noise. He found her very clear in her testimony that there was no one in the van. He preferred her evidence and that of P.C. Singh, finding neither had any interest in the outcome of the arbitration. Further, he found their evidence consistent internally and with each other.

The Arbitrator was not persuaded that these two witnesses, who had known each other through Ms. Spyropoulos’ work as a community liaison, had tainted each other’s recollections or had colluded in the presentation of their evidence.

(2) P.C. Singh testified that he attended at JFS in response to a dispatch request. He obtained a signed statement from Mr. Mohammed within an estimated three hours of the time of the impact. P.C. Singh testified that he spoke to Mr. Mohammed in English. Mr. Mohammed had no difficulty understanding him. Mr. Mohammed’s statement was that he was at the other end of the plaza talking to a friend when the impact occurred. P.C. Singh completed a Motor Vehicle Accident Report noting the vehicle as being unattended.

In his affidavit sworn April 26, 2013, Mr. Mohammed deposed that he did not tell the officer there were passengers in his vehicle because he was not asked. The Arbitrator found little reason to question P.C. Singh’s recollection or the accuracy of his notes, which Mr. Mohammed admitted endorsing when they were given.

(3) There were inconsistencies in the Appellant’s evidence. These included three different versions of the events leading up to the incident. In addition, the Appellant’s prior statement was that there was a woman in the car that hit them, whom he saw yelling at her young son. In his oral testimony the Appellant said that there was not a woman in the car. Rather, she came out of a store. In his prior statement, the Appellant stated the young boy tried to run away. In his oral testimony, the Appellant stated that he did not say that.

(4) There were substantial inconsistencies in the evidence of Mr. Mohammed and Mr. Dorre as to how they came to be in the van and regarding the aftermath of the impact. The Arbitrator found there was nothing to suggest that any of the alleged occupants had serious deficiencies in English such as to lead to misunderstandings or inconsistencies.

The Appellant’s written submissions cited Arbitrator Miller in Adusei-Peasah:

In assessing credibility there are a number of factors that an adjudicator must take into consideration. These include: the demeanour of the witness; whether there are internal inconsistencies in the testimony; whether the witness’s testimony has been contradicted by other evidence; and whether the testimony is plausible.

The Arbitrator explicitly noted inconsistencies in the Appellant’s testimony. There were inconsistencies in the evidence of the two witnesses called by the Appellant. The Arbitrator found that evidence contradicted by other evidence. The Arbitrator found that contradictory evidence consistent and credible. The Appellant takes issue with the weighing or sufficiency of evidence. However, this is not a case of findings of fact made in the complete absence of supporting evidence that would constitute an error of law.

Accordingly, I turn to the Appellant’ further submission that the Arbitrator’s decision was based on conjecture and speculation. In Lombardi, Delegate McMahon cited Johnston v. Murchinson, 1995 CanLII 8966 (PE SCAD), [1995] P.E.I.J. No. 23, where the Court of Appeal quoted with approval the following passage from Caswell v. Powel Duffrny Associated Collieries Ltd., [1940] A.C. 152 (H.L.):

Inferences must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish .... But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.

Murphy v. Murphy, 2013 ONSC 7015, held:

… Reasons are adequate if they are responsive to the case’s live issues and the parties’ key arguments. Their sufficiency is measured not in the abstract, but as they respond to the substance of what was in issue: R. v. M. (R.E.), supra, at para. 34; R. v. Walker, 2008 SCC 34, [2008] 2 S.C.R. 245, [2008] S.C.J. No. 34, at para. 20. Adequate reasons will communicate the findings of fact upon which the court or tribunal based its decision, the court’s or tribunal’s conclusion, and the reasoning process that led to the conclusion. A reviewing court, however, does not have the power [page760] to intervene simply because it thinks the trial court did a poor job of expressing itself: R. v. Sheppard, supra, at para. 26.

The Arbitrator’s reasons were responsive to the case’s live issues and the parties’ key arguments.

The Arbitrator accepted Ms. Spyropoulos’ evidence, including that eleven seconds after the sound of impact she saw no one in the van or in the vicinity of the van other than the youth in the other vehicle. The Arbitrator specifically stated he preferred the evidence of Ms. Spyropoulos and P.C. Singh. The Arbitrator did not accept the evidence of the Appellant and his two witnesses that they stayed in the van for one or two minutes or more after impact, and in the vicinity for some time longer, surrounded by a large number of people.

The evidence relied upon by the Arbitrator was not minor in nature. Nor was it a “red herring.” Rather, it went to the substantial and material elements of the claim being made, whether the Appellant had established on a balance of probabilities that he was in the van at the time of impact.

I agree with the Respondent’s submission that an inference could be properly made that the Appellant was not in the vehicle at the time of impact based on the evidence accepted by the Arbitrator that Ms. Spyropoulos immediately went to investigate and saw no one in the van or in the area of the van other than the youth in the other car. This evidence was consistent with the evidence of Mr. Mohammed failing to report that anyone was in the van, signing a statement that he was on the other side of the plaza when the impact occurred.

I am not persuaded that this matter should be returned to a new arbitration hearing based on the submission that the Arbitrator failed to explicitly state his obvious inference from the evidence he accepted and that which he rejected, that it was simply not credible that the Appellant and his two friends would have raced out of the van within eleven seconds of impact.

In any event, there was no evidence, or allegation, the Appellant and his two witnesses left the van and the vicinity within eleven seconds of impact.

The Arbitrator clearly inferred, based on the evidence that he accepted, that the Appellant was not in the van at the time of impact. This was not simply conjecture or speculation in the absence of any objective facts. As stated in R. v. Sheppard, this reviewing tribunal does not have the power to intervene simply because it is argued that the adjudicator at first instance could have better expressed himself.

Accordingly, this appeal is dismissed and the Arbitrator’s March 24, 2014 decision is confirmed.

VI. EXPENSES

If the parties cannot agree on the legal expenses of this appeal, amending Rule 79.1 of the Code, as allowed under Rule 81.1, the time for either party to request an appeal expense hearing is extended, as requested, to forty-five days from the date of this decision.

The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as submissions on such entitlement or quantum expense issues as are in dispute.

December 23, 2014

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.