Neutral Citation: 2015 ONFSCDRS 50 FSCO A13-000293

BETWEEN:

BADRIA FIRIN Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator John Wilson Heard: By written submiussions Appearances: No-one appearing for Mrs. Firin Aldo Pichetti and Carl Vondercrone for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Badria Firin, was injured in a motor vehicle accident on July 13, 2009. She applied for statutory 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 Mrs. Firin applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Should Ms. Firin’s claims for statutory accident benefits from State Farm be dismissed?

Result:

Ms. Firin’s claims are dismissed.
State Farm is entitled to its reasonable expenses in this matter.

EVIDENCE AND ANALYSIS:

Ms. Firin filed for arbitration on the issues of housekeeping, attendant care, and non-earner benefits arising from her claim to have been in a motor vehicle accident on July 13, 2009.

At the time of her filing, she was represented by the firm of Bergel Magence. The application for arbitration was received by FSCO on January 3, 2013.

On December 30, 2013, Bergel Magence filed a motion to be removed as counsel of record. The motion was based on the “material breakdown of the lawyer-client relationship”.

In its motion materials Bergel Magence documented serial attempts to contact Ms. Firin to discuss the upcoming pre-hearing covering a period from August to November 2013. The supporting affidavit also noted efforts to confirm Ms. Firin’s contact address through a positive driver’s licence search. According to Bergel Magence no response was ever received from Ms. Firin.

The motion materials were served on Ms. Firin at the address indicated on her application and confirmed by the licence search.

A pre-hearing had been scheduled for January 30, 2014. The motion to be removed from the record was scheduled for the beginning of the time set aside for the pre-hearing.

I was satisfied that Bergel Magence had satisfied its obligations under Rule 9 of the Dispute Resolution Practice Code. Allstate did not object to the proposed order. Ms. Firin neither appeared nor filed any responding material. Consequently, I ordered that Bergel Magence be removed as counsel of record.

Given State Farm’s concerns about the evidence offered by Bergel Magence of Ms. Firin’s failure to respond to correspondence or telephone calls, I also ordered that she provide written confirmation to the Financial Services Commission that she intended to continue with this arbitration, within 30 days of the pre-hearing, and provide a confirmation of her address and contact numbers. I also advised that a failure to respond within the 30 day time-limit could result in the dismissal of the arbitration.

Ms. Firin did not respond within the time-limit set. In fact she did not respond at all.

On February 19, 2014, State Farm filed a motion to dismiss the arbitration. The Insurer’s reasons for requesting a dismissal order were that:

Ms. Firin had failed to attend at the scheduled pre-hearing;
Ms. Firin failed to comply with my order dated January 30, 2014.

Section 4.6(1) of the Statutory Powers Procedure Act (“SPPA”),which governs the FSCO process, provides:

Dismissal of proceeding without hearing

4.6(1) Subject to subsections (5) and (6), a tribunal may dismiss a proceeding without a hearing if,

(a) the proceeding is frivolous, vexatious or is commenced in bad faith;

(b) the proceeding relates to matters that are outside the jurisdiction of the tribunal;

(c) or some aspect of the statutory requirements for bringing the proceeding has not been met.

“Vexatious” is not a term used in ordinary conversation. Rather, it is a term of art used in law to describe a specific manner of conduct, especially in a judicial or quasi-judicial forum. Lord Blackburn observed in Metropolitan Bank Ltd. et al. v. Pooley (1885) 10 App. Cas. 210:

(T)he Court had inherently in its power the right to see that its process was not abused by a proceeding without reasonable grounds, so as to be vexatious and harassing.

“Vexatious” litigation includes not only situations where the conduct of a party to litigation is egregious but also situations where the court has no power to grant the relief sought (see Dreyfus v. Peruvian Guano Co. (1889) 41 Ch.D. 151); if no reasonable person can possibly expect to obtain relief in it, (see Lawrance v. Lord Norreys et al., (1888) 39 Ch. D. 213); or if the applicant has no proper authority to pursue the remedy (see R. ex rel Tolfree v. Clark et al. 1943 CanLII 90 (ON CA), [1943] O.R. 501).

The Divisional Court in Re: Linda Desjardins, Plaintiff, and The Society of Obstetricians and Gynecologists of Canada and Dr. Andre LaLonde, Defendants 2012 ONSC 7294, [2012] O.J. No. 6098 remarked:

The Rules do not contain any definition of what constitutes an action that is frivolous, vexatious, or otherwise an abuse of process pursuant to Rule 21. I agree with the comments of Justice Armstrong in Currie, supra, where he noted, “It is apparent that there is a degree of overlap in the meaning of the terms frivolous, vexatious and abuse of process. What I take from the authorities is that any action for which there is clearly no merit may qualify for classification as frivolous, vexatious or an abuse of process.”

There is no reason that Section 4.6(1) of the SPPA should not be interpreted in a like manner.

In this case, consideration should be given as to whether Ms. Firin “can possibly expect to obtain relief” by means of this arbitration, as it currently stands.

In that context, failure to obey an arbitral order, as well as any evidence of the effective abandonment of a claim would also give reason to dismiss an arbitration as vexatious.

The Court of Appeal in Paul Magder Furs Ltd. et al v. Attorney General for Ontario, 1991 CanLII 7053 (ON CA), [1991] O.J. No. 2025 stated unequivocally that:

(I)t is an abuse of process to assert a right to be heard by the court and at the same time refuse to undertake to obey the order of the court so long as it remains in force.

This is based on the principle expressed in Surgeoner v. Surgeoner, [1992] O.J. No. 299 (Gen. Div.) that:

No society which believes in a system of even-handed justice could permit its members to ignore, disobey, or defy its laws and its courts' orders at their whim because in their own particular view it is right to do so. A society which countenanced such conduct was a society tottering on the precipice of disorder and injustice.

While it would be wrong to routinely dismiss arbitrations where a party was potentially in default of an order or undertaking, or where there were minor delays in advancing a matter, I do not find this to be the case in Ms. Firin’s claim.

Rule 1.1 of the Dispute Resolution Practice Code sets out an overall approach to the arbitration process.

1.1 These Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.

It runs counter to the spirit of the arbitration system to insist that parties proceed ritually through all stages of the arbitration process when there is a more effective, efficient and appropriate shortcut available.

For reasons perhaps known only to her, Ms. Firin has decided not to participate directly in advancing her claim beyond retaining counsel to file her claim. Indeed she didn’t even bother to sign the Application for Arbitration which brought her dispute into this forum.

As is apparent, there are cogent reasons for ordering a dismissal at this time, based specifically on my finding that a continuation of the arbitration in light of the ongoing refusal to obey arbitral orders, and to participate in the arbitration process would specifically be an abuse of process, and as such, vexatious.

The facts are not in dispute. Ms. Firin chose not to attend her pre-hearing, despite being given notice by the Commission. Ms. Firin refused to contact her own counsel and respond to requests for instructions. She took no action to move her arbitration forward, even when her counsel were removed from the record. She failed to respond to notices and an order requiring her to advise whether she intended to continue with her arbitration. She failed to respond to the Insurer’s Notice of Motion, even though the motion specified that her arbitration application could be dismissed as a consequence of any such default.

I can only infer from her conduct that Ms. Firin has lost any interest she might have ever had in pursuing her claim. Given her ongoing lack of interest in buttressing her claim, and that the onus is on her to provide credible evidence in support that claim, I find that “no reasonable person can possibly expect to obtain relief in it”.

I find that the pre-conditions of section 4.6 of the SPPA have been met and that Ms. Firin had proper notice that her claims would be dismissed if she failed to respond to the orders issued in this arbitration process.

I find as well that it is appropriate to dismiss Ms. Firin’s claims on the basis that continuing to require State Farm to participate in a fruitless arbitration would be frivolous, vexatious and an abuse of process. There is nothing to be gained by proceeding to a full arbitration on the merits, since without Ms. Firin’s participation it would be little more than a sham, unnecessarily bringing the arbitration process into disrepute.

EXPENSES:

While in the approach to expenses taken by the Commission, costs do not always slavishly follow the cause, I find that in this case there is no reason to deviate from that general maxim. Ms. Firin in abandoning her cause and in failing to respond to the Insurer’s motion effectively abandoned the issue of expenses as well.

But for the actions of Ms. Firin in bringing State Farm to this arbitration forum, State Farm would not have had to retain counsel and undertake the process of defending its actions in handling this claim.

Given that I have found the abandonment of this claim and the failure to respond to orders to be an abuse of process, it is only fair that State Farm should have some basic recompense for the expenses they have incurred. State Farm shall have its reasonable expenses in this matter.

As to the quantum of those expenses, State Farm should submit a brief submission on expenses together with its expense summary providing that such is served and filed within 30 days of the issuance of this decision. Ms. Firin shall have a further 14 days to serve and file any submissions in response, if she intends to dispute the amounts claimed by State Farm.

March 16, 2015

John Wilson Arbitrator

Financial Services Commission of Ontario