Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2014 ONFSCDRS 86
Appeal P13-00016
OFFICE OF THE DIRECTOR OF ARBITRATIONS
AVIVA CANADA INC.
Appellant
and
WAYNE HENRY
Respondent
BEFORE:
Delegate Lawrence Blackman
REPRESENTATIVES:
Mr. James M. Brown for the Appellant, Aviva Canada Inc.
Neither Mr. Wayne Henry nor anyone on his behalf attended or participated
HEARING DATE:
May 22, 2014
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The Arbitrator’s April 16, 2013 order is rescinded. The question of the Respondent’s capacity to proceed in the dispute resolution process is remitted, together with any associated or consequent questions, to arbitration for a new hearing pursuant to Rule 10.3 of the Dispute Resolution Practice Code (Fourth Edition, Updated January 2014). Pending a determination of capacity, the final determination of the arbitration is stayed, subject to any further or other appellate order.
There is no order as to legal expenses.
May 29, 2014
Lawrence Blackman Director’s Delegate
Date
REASONS FOR DECISION
I. BACKGROUND AND THE NATURE OF THE APPEAL
This appeal pertains to the process applied in determining whether a party has the mental capacity to proceed in the dispute resolution process.
The Respondent, Mr. Wayne Henry, was a front seat passenger injured in a May 17, 2008 motor vehicle accident. The driver of the vehicle was killed. The Respondent was diagnosed with bilateral fractures of his thigh bones, a fractured nose, multiple lacerations, a closed head injury and major depression. He was in hospital for two months.
Pursuant to the Schedule1 the Appellant, Aviva Canada Inc., paid the Respondent attendant care, housekeeping and caregiver benefits until March 8, 2010. After a failed mediation, the Respondent applied for arbitration. On a motion for interim benefits, Arbitrator Killoran’s March 1, 2012 decision granted the Respondent interim benefits to May 17, 2010 (the entitlement tests changing at 104 weeks post-accident), subject to a final arbitration order.
The main arbitration hearing commenced November 19, 2012 before Arbitrator Rogers (“the Arbitrator”). The Arbitrator’s April 16, 2013 decision, at page three, states that at the November 19, 2012 hearing he found that the Respondent “lacked the ability to meaningfully participate in and appreciate the nature of the dispute resolution process.” This reiterated the Arbitrator’s November 20, 2012 letter:
… During my inquiry to determine the issues remaining in dispute, it became apparent that Mr. Henry lacks the ability to meaningfully participate in and appreciate the nature of the dispute resolution process.
The Arbitrator adjourned the hearing to March 15, 2013 to allow the Respondent an opportunity to obtain legal representation. As that did not occur, the Arbitrator wrote the Public Guardian and Trustee (the “PG&T”) on January 10, 2013, confirming that on November 19, 2012 he had “concluded that Mr. Henry lacked the ability to meaningfully participate in and appreciate the nature of the dispute resolution process.” The Arbitrator asked the PG&T to consider assessing the Respondent’s capacity to determine whether it should represent him in this arbitration.
Neither the Respondent nor anyone on his behalf appeared at the March 15, 2013 hearing resumption. The Arbitrator’s April 16, 2013 decision states that the PG&T had advised it would take no further steps as preliminary information indicated the Respondent did not meet the test under the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”) of lack of capacity to manage his property.
At the resumption, the Arbitrator denied the Appellant’s request that the arbitration be dismissed, as fairness required protecting the Respondent’s interests while he lacked the capacity to pursue those interests. The Arbitrator thus stayed the arbitration. Either party could request the arbitration be reopened if (a) there was a change in the Respondent’s ability to meaningfully participate in the process, (b) the Respondent retained representation, or (c) a litigation guardian was appointed.
The Notice of Appeal sought an order that the Arbitrator’s April 16, 2013 order be set aside and substituted with an order either dismissing the arbitration or setting a new hearing date.
The Respondent did not respond to this appeal although served in accordance with the Dispute Resolution Practice Code (Fourth Edition, Updated January 2014) (the “Code”), as confirmed by the Appellant’s May 16, 2013 Statement of Service affirming personal service. The Respondent has not responded to any letters from this office, sent to him in accordance with Rule 9.1(c) of the Code to his last known address obtained from the Respondent’s Applications for Mediation and Arbitration. Nor did the Respondent respond to any of the messages left by the Appeals Administrator at his last known telephone number.
This office wrote the Respondent advising how he might obtain representation, as well as extending the time for his response. A Notice of Preliminary Issues Hearing – Appeal, dated October 10, 2013, was sent to the parties. The hearing, scheduled to start at 10:00 a.m. on November 19, 2013, was held down to await the Respondent. The Respondent did not attend, nor did anyone appear on his behalf. Rule 58 of the Code provides that where a Notice of Hearing has been delivered to a party and the party does not attend, oral submissions or the hearing may proceed in the party’s absence.
My December 6, 2013 order exercised my discretion under Rules 50.2 and 51.2(c) of the Code to accept this appeal from the April 16, 2013 preliminary arbitration decision, but restricted to whether the Arbitrator had procedurally erred in determining the Respondent’s capacity to proceed with his arbitration. I was persuaded there was strength in this aspect of the appeal and that the issue was important both as it affected the Respondent’s autonomy and as a precedent.
A March 17, 2014 Notice of Hearing – Appeal was sent to the parties. The appeal hearing, scheduled to start at 10:00 a.m. on May 22, 2014, was again held down to await the Respondent. The Respondent did not attend, nor anyone on his behalf. Pursuant to Rule 58 of the Code, I proceeded with the appeal hearing.
II. ANALYSIS
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. Delegate Makepeace, in Howard and State Farm Mutual Automobile Insurance Company, (FSCO P04-00017, November 19, 2004), held that questions of law include questions of fair procedure. This is consistent with the Supreme Court of Canada’s decision in Cardinal v. Director of Kent Institution, 1985 CanLII 23 (SCC), [1985] 2 SCR 643:
… the denial of a right to a fair hearing must always render a decision invalid, whether or not it may appear to a reviewing court that the hearing would likely have resulted in a different decision. The right to a fair hearing must be regarded as an independent, unqualified right which finds its essential justification in the sense of procedural justice which any person affected by an administrative decision is entitled to have. It is not for a court to deny that right and sense of justice on the basis of speculation as to what the result might have been had there been a hearing.
Rule 10 of the Code pertains to parties under a disability. As stated by Arbitrator Wilson, in A.A. and Dominion of Canada General Insurance Company, (FSCO A08-001205, November 27, 2009), the SDA presumes capacity. Consistent with the SDA, Rule 10.1 of the Code provides that a party is presumed to have the mental capacity to manage his or her property, appoint and instruct a representative, and conduct his or her own case, other than a minor or a person who has been declared mentally incapable within the meaning of Sections 6 or 45 of the SDA.
In L.G. and Lombard General Insurance Company of Canada, (FSCO A09-000531, January 28, 2010), Arbitrator Wilson stated:
The test for interfering with the autonomy of an individual, to the extent of requiring him or her to be represented by a litigation guardian if an insured wishes to pursue an accident benefit claim at arbitration is not however one of the “best interest” of the party in question. Rather it is whether there is evidence before the arbitrator that would justify the conclusion that L.G. is “not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.”
The procedure under Rule 10 is intended, in part, to prevent depriving an individual of his or her autonomy without proper process, even if the adjudicator is seeking to protect a party’s best interests. In this case the Arbitrator, as noted, determined on November 19, 2012 that the Respondent “lacked the ability to meaningfully participate in and appreciate the nature of the dispute resolution process.” This was confirmed in the Arbitrator’s November 20, 2012 letter to the parties, his January 10, 2013 letter to the PG&T and his April 16, 2013 decision.
Rule 10.3 of Code provides that where an adult party has not been declared mentally incapable under the SDA but exhibits signs of mental difficulty during the course of a proceeding, either party may request a hearing on a preliminary issue or the Dispute Resolution Group may direct a hearing on a preliminary issue to determine whether:
(a) the party has the mental capacity to proceed in the dispute resolution process;
(b) there is an attorney with a valid continuing power of attorney over the party’s property; or
(c) there is someone who has made or intends to make arrangements for the appointment of a guardian over the party’s property under the provisions of the SDA.
Rule 10.4 provides that the parties shall be given written notice of the hearing on a preliminary issue to inquire into a party’s mental capacity to proceed in the dispute resolution process.
Notwithstanding the Arbitrator’s explicit intent to protect the Respondent, he erred in not providing a fair hearing of the question of the Respondent’s capacity, as follows:
(1) Contrary to Rule 10.3 of the Code, having noted concerns regarding the Respondent’s understanding of the process and whether he was competent to represent himself, the Arbitrator did not direct a hearing on a preliminary issue of whether the Respondent had the mental capacity to proceed in the dispute resolution process.
(2) Contrary to Rule 10.4, the Arbitrator did not provide written notice of the hearing on the specific preliminary issue of whether the Respondent had the mental capacity to proceed in the dispute resolution process.
(3) The Arbitrator failed to provide notice to the Respondent that he was contemplating making a finding that the Respondent lacked the mental capacity to proceed in the dispute resolution process, or the consequences of such a finding to the self-represented party.
(4) The Arbitrator failed to provide the Respondent with an opportunity to present evidence or provide submissions on the question of his capacity.
(5) The Arbitrator did ask the Appellant’s counsel for her view on whether the Respondent had “a true understanding or enough of an understanding of the process in order to be able to represent himself.” Counsel replied she had “no hesitancy saying [the Respondent] has not demonstrated that competence before you.”
I am not persuaded that this negates the above omissions or that it constitutes the requisite notice and/or a meaningful opportunity for the Appellant to provide submissions or evidence specific to a party’s mental capacity, that is, understanding the information that is relevant to making a required decision and the ability to appreciate the reasonably foreseeable consequences of a decision or the lack of a decision. 2
The purpose of adjourning the arbitration to March 15, 2013 was not to determine the Respondent’s mental capacity to proceed in the dispute resolution process. That had already been decided on November 19, 2012. Rather, the purpose was to determine possible legal representation for the Respondent, including the PG&T.
I agree with the Appellant that both parties have been prejudiced by the process. The Respondent has been deprived of his autonomy in the absence of the protections provided by Rule 10 of the Code. The Appellant has been denied proper notice and a meaningful opportunity to respond to the Arbitrator’s concern, no matter how well-founded or well-intended that concern.
Following Cardinal, I find that the denial of a right of a fair hearing on the question of the Respondent’s capacity renders the April 16, 2013 decision invalid, regardless of whether or not it may appear to a reviewing body that the hearing contemplated by Rule 10 of the Code would likely have resulted in a different decision.
Accordingly, the Arbitrator’s April 16, 2013 order is rescinded. The question of the Respondent’s capacity to proceed in the dispute resolution process is remitted, together with any associated or consequent questions, to arbitration for a new hearing pursuant to Rule 10.3 of the Code. Pending a determination of capacity, the final determination of the arbitration is stayed, subject to any further or other appellate order.
III. EXPENSES
Legal expenses are not sought in this appeal.
In the procedural circumstances of this case, as set out above, I find it appropriate that there should be no award of legal expenses of this appeal.
May 29, 2014
Lawrence Blackman Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Section 6 of the SDA states that a “person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.”