Financial Services Commission of Ontario

Neutral Citation: 2015 ONFSCDRS 234 FSCO A13-012019

BETWEEN:

GUNAINA SHEMOUN Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Lynda Tanaka

Heard: By teleconference on August 26, 2015

Appearances: Ms. Gunaina Shemoun did not participate Ms. Bevin Shores for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ms. Gunaina Shemoun, was injured in a motor vehicle accident on January 1, 2011 and sought 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 the Applicant, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

State Farm brought a Motion for dismissal of the Applicant’s Application for Arbitration under either Rule 68.2 or Rule 70.3, both of the Dispute Resolution Practice Code (“the DRPC”), and an order that the Applicant pay the Respondent’s expenses and disbursements of this proceeding in accordance with Rule 75 of the DRPC.

The issues in this Preliminary Issue Hearing are:

1. Should the Application for Arbitration be dismissed?
2. Should State Farm be entitled to expenses paid by the Applicant in preparing for the Arbitration process in this proceeding?

Result:

1. The Application for Arbitration is dismissed.
2. The Applicant shall pay to State Farm $1,521.30, being its expenses in the amount of $1,197.17 plus HST in the amount of $155.63 for a total of $1,352.80 plus $168.50 in disbursements.

EVIDENCE AND ANALYSIS:

The Application for Arbitration was filed September 25, 2013. The first Pre-Hearing was held July 28, 2014, and the Applicant and her representative participated. The parties were unable to settle but identified witnesses and a Hearing was scheduled for three days commencing April 15, 2015. On February 11, 2015, the representative served materials requesting that they be removed from the record, on notice to the Applicant. The Applicant’s Representative indicated that they had been unable to contact the Applicant despite 15 telephone call attempts and 10 letters that were sent to the Applicant.²

The Pre-Hearing Arbitrator determined that the representative should be removed from the record on the basis of the breakdown of the solicitor and client relationship. That order was granted and the Applicant was treated as an unrepresented party. The Hearing was adjourned on consent of State Farm and a further date of June 10, 2015 was set for a reconvened Pre-Hearing.³ A letter, dated April 10, 2015, setting out these events was sent to the Applicant at her last known address on file.⁴

State Farm served and filed a notice of Motion and supporting affidavit requesting dismissal of the Application for Arbitration in this matter, returnable June 10, 2015. Due to administrative oversight, the teleconference Motion was not held. By letter, dated July 7, 2015 (“July 7 letter”), sent to the Applicant and State Farm, a further date was set of August 26, 2015 at 10:00 a.m. to hear the Motion by State Farm. The issues and potential outcome (and therefore the risk for the Applicant) were clearly identified in the letter of April 10, 2015, the Motion materials served returnable June 10, 2015 and also in the July 7, 2015, letter sent to the Applicant by the Pre-Hearing Arbitrator.

In the letter, dated April 10, 2015,⁵ the Applicant was asked to contact ADR Chambers to provide direction as to how she would be proceeding with the Application and to advise if a new representative was retained. She was advised that if she did not respond on or before May 29, 2015, ADR Chambers would assume that she had chosen not to move forward with her application and her file would be closed.

There has been no written communication from the Applicant, despite the fact that contact information for ADR Chambers has been consistently provided in each letter sent to the Applicant. All correspondence has been sent to her at her last known address on the file.⁶ Therefore the teleconference Motion scheduled for August 26, 2015 proceeded with State Farm’s representative only.

I find that the Applicant has had notice of all proceedings scheduled, rescheduled and resumed in this matter. She has failed to respond to all requests that she contact ADR Chambers.

I note that she did not sign the original Application of Arbitration filed in this matter. Other than attending the original Pre-Hearing (as noted in the letter issued by ADR Chambers subsequent to that Pre-Hearing), she has not participated in the process. Her lack of response to the correspondence and to her own representative and her failure to participate as an unrepresented Applicant have hindered the processing of her claim.

The Motion requests the relief under the authority of either Rule 68.2 or Rule 70.3 of the DRPC. State Farm has provided case law⁷ in which both rules have been relied on by other Arbitrators. I do not have sufficient evidence to satisfy the requirements of Rule 68.2 that the claims, when she brought them, were frivolous, vexatious, or brought in bad faith.

On the facts of this case as set out above, I rely on Rule 70.3. The Applicant sought to have her claims to benefits determined by Arbitration but has failed to pursue them diligently. I find that her course of conduct constitutes her withdrawal of her claims in the terms of Rule 70.3.

State Farm’s Motion to dismiss the Application for Arbitration is therefore granted.

EXPENSES:

Rule 70.3 provides that an Arbitrator may award expenses as permitted by Rule 75 and following. State Farm has provided a Costs Outline requesting fees using the Legal Aid Tariff rates of $1,098.18 and an estimated Counsel fee for the appearance on the teleconference of August 26, 2015 of $98.99 plus disbursements for photocopying. I am entitled to regard these claims as unopposed.

I have reviewed the docket entries and the hours identified for each item. I have reviewed the criteria set out in Sub-rule 75.2 of the DRPC in making my determination. The conduct of the Applicant has tended to prolong, obstruct and hinder the proceeding. Her conduct has required additional Pre-Hearings and orders to address the withdrawal of her representative based on her non-responsiveness to her own representative. State Farm has in fact achieved success in its defence of the claim. Therefore the criteria a), d), and e) of Sub-rule 75.2 are satisfied.

State Farm has also requested $168.50 in photocopies. I have been given no invoices for such copies and no detailed substantiation for the claim. I note, however, that it is not unusual for these cases to be very paper intensive for production and disclosure and the preparation for the Arbitration Hearing. I also note that the Motion for the representative to be removed from the record was around sixty (60) days before the Hearing was scheduled to commence so much of the photocopying necessary for the Hearing for a joint book of documents would have been done.

I therefore grant the Motion requesting the costs and disbursements as claimed, with HST on the fee portion only.

November 6, 2015

Lynda Tanaka Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2015 ONFSCDRS 234 FSCO A13-012019

BETWEEN:

GUNAINA SHEMOUN Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as amended, it is ordered that:

1. The Application for Arbitration is dismissed.
2. The Applicant shall pay to State Farm $1521.30, being its expenses in the amount of $1,197.17 plus HST in the amount of $155.63 for a total of $1352.80 plus $168.50 in disbursements.

November 6, 2015

Lynda Tanaka Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Paragraph 5, Affidavit of Amber Dolbec, sworn June 4, 2015, Motion Record.
3. 3Exhibit B, Affidavit of Amber Dolbec, supra.
4. 4Exhibit C, Affidavit of Amber Dolbec, supra.
5. 5Ibid.
6. 6Paragraph 6, Affidavit of Amber Dolbec, supra.
7. 7Dahir and State Farm Mutual Automobile Insurance Company, FSCO A13-001029 (January 14, 2015); Mohseni and Unifund Insurance Company, FSCO A13-000623 (January 5, 2015); Putrus and State Farm Mutual Automobile Insurance Company, FSCO A13-009428 (November 26, 2014); Tursunov and Unifund Assurance Company, FSCO A13-002761 (November 26, 2014); and Huang and Co-operators General Insurance Company, FSCO A10-001323 (January 12, 2011).