Neutral Citation: 2015 ONFSCDRS 93 FSCO A12-001238

BETWEEN:

VILLARD ALEX VITALIS Applicant

and

INTACT INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator John Wilson Heard: November 15, 2013, at the offices of the Financial Services Commission of Ontario in Toronto, with final submissions receceived August 8, 2014 Appearances: Paul Murphy for Mr. Vitalis Andrew C. McKague for Intact Insurance Company

Issues:

The Applicant, Villard Alex Vitalis, claimed to have been injured in a motor vehicle accident on October 25, 2009. He applied for statutory accident benefits from Intact Insurance Company (“Intact”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Vitalis 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 Mr. Villard Vitalis’ claim be dismissed for a failure to participate in the arbitration process?
If, so should Mr. Vitalis be liable for Intact’s expenses in this matter?

Result:

Mr. Vitalis’ claims against Intact are dismissed.
Mr. Vitalis shall pay Intact’s expenses in this matter.

EVIDENCE AND ANALYSIS:

Subsequent to an accident which involved his parents as well, Mr. Villard Vitalis claimed for attendant care services, massage and physiotherapy, the cost of examinations, and interest and costs. Although he was shown as living at the same address as his parents, he was an adult at the time of the claim.

Despite the fact that Villard Vitalis, or someone acting in his name, has advanced an accident benefits claim as part of the larger claim advanced by his family, he has never personally taken part in any of the procedures in this arbitration. He has not attended or been available for the multiple pre-hearings, and cannot be reached at the address or contact numbers shown on the application for arbitration.

Despite many attempts to reach him by the Commission, through both his counsel and his family, his whereabouts have remained unknown. The best information advanced by his family was that he was with the armed forces of the United States and couldn’t be reached.

It is odd in this day of instantaneous electronic contact for someone to go completely missing, even to his family. Still, as a reasonable adult, Villard must have known of the need to follow up on his claims against Intact.

If the theory of his enrolment in the American Army was correct, it would also suggest a higher level of functioning than that represented by his claims against Intact which include ongoing claims for attendant care in particular.

Intact has taken the position that the presence of the parties at the hearing is necessary due to concerns about credibility, and the logistical problems of cross-examining a witness participating electronically in a hearing.

Intact’s position is supported by both practice at the Commission and section 279(5) of the Insurance Act.

I note that Intact has reiterated its concerns about the failure of Villard Vitalis to participate, to date, and even, it seems, to provide instructions to his counsel. Intact has also previously mentioned its intention of having Villard`s claim dismissed as abandoned.

While, from the beginning of the pre-hearing process, there have been some questions about the physical presence of the parties, there is no question that the actual hearing dates, commencing November 4, 2013 were set to ensure the availability, and the presence of the parties (including Villard) at a hearing to take place in Toronto.

That being said, the correspondence arising from the pre-hearings may have reflected some lack of clarity as to the actual arrangements at the hearing. There was however, never any order either excusing the parties from attendance or setting up an agreed alternative means of obtaining their participation in the hearing process.

This dismissal hearing arose out of the teleconference in which I adjourned the November 4, 2013 hearing dates for all the Vitalis family claimants but reserved as to any conditions to be put on to the adjournment. There was also a specific motion before me to dismiss Mr. Villard Vitalis’ arbitration as abandoned.

As I noted at the adjournment hearing, the correspondence in the Commission file substantiated Intact’s position that the Applicants, including Mr. Villard Vitalis, were at all times expected to appear in person at the arbitration hearing in Toronto, unless an order was made to the contrary. Indeed the original pre-hearing letter dated December 3, 2013 stated:

The hearing process at FSCO assumes the presence of all parties for both the pre-hearing and hearing process. Any deviation from this principle is only possible with leave of an arbitrator, who may also, at his or her discretion, specify alternative attendance through telephone, Skype or other electronic means. Any such requests must be made on a timely basis.

The same was reiterated July 4, 2012, September 19, 2013 and on October 7, 2013 when Mr. Blott's office first formally raised the issue of the participation of Mr. and Mrs. Vitalis by telephone from St. Lucia instead of them being present in Toronto for the arbitration. There was no alternative proposal put forward with regard to how Villard Vitalis would participate in any hearing, since it was clear that his counsel had no idea how to reach him. In any event, no order was ever made dispensing with the attendance of any of the parties at the arbitration hearing in Toronto.

While it was possible to deal fairly with the issue of the adjournment of Mr. and Mrs. Vitalis' arbitration through the imposition of strict conditions including costs, the request by Intact that Mr. Villard Vitalis’ claim be dismissed as abandoned presented different problems.

As noted earlier, Mr. Villard Vitalis has never participated in any pre-hearing or settlement conference in this matter. Although he was said to be in the armed forces of the United States, it is clear that neither his counsel nor his family had any clear idea of how he could be reached. Indeed Mr. Murphy, appearing for Mr. Blott, confirmed that he had been unable to either contact Mr. Villard Vitalis directly or otherwise obtain instructions from him.

Given this pattern of non-contact, on July 3, 2013, I gave Mr. Murphy, counsel for Villard Vitalis, a limited time to confirm whether or not he had instructions to proceed. Then on September 19, 2013, in the absence of any confirmation I ordered that unless Mr. Murphy had advised that he obtained instructions to proceed and is in a position to confirm that he remains counsel for Villard Vitalis by October 4, 2013, the Insurer could take immediate steps to have the arbitration application made by Villard Vitalis dismissed.

At both the initial adjournment conference and the hearing on conditions to the adjournment, Intact reiterated its request to dismiss the claim.

At the very least it may be inferred from the total failure of Mr. Vitalis to contact his solicitor, and participate in the hearing process that he has abandoned his claim for accident benefits against Intact.

I advised counsel that I was willing to dismiss the Villard Vitalis arbitration on that basis, but out of an abundance of caution, given the non-communication issue, I would ask the Insurer to make one final effort to advise Mr. Villard Vitalis of the dismissal of his claim by the publication of a notice in a newspaper of general distribution in southern Ontario directed at Mr. Vitalis.

The dismissal order was suspended until December 31, 2013, to allow for this final notice to be given to Villard Vitalis. In the absence of a response from Mr. Vitalis, once proof of publication provided and the time-limit expired, a formal dismissal order would follow.

Intact confirmed by letter, enclosing a copy of the advertisement that it had complied with its obligations pursuant to my order. Intact received no response from anyone arising from the published notice. Likewise no response was received by FSCO, and none was reported by his counsel of record.

Separately from the powers granted under the Insurance Act to conduct arbitrations, section 23 of the Statutory Powers Procedure Act² grants adjudicators, including arbitrators, a wide power to control the process and prevent an abuse of that process. Penalties for abuse of process, such as dismissal or punitive costs are separate and supplemental to any sanctions contained in the Schedule, since they deal with the conduct of parties in the context of an arbitration.

There are cogent reasons for using the powers under the SPPA and the Code to dismiss this arbitration.

Firstly, there is the ongoing failure of Villard Vitalis to attend any of the pre-hearings or hearings in this matter, notwithstanding an obligation to be present and participate.

Secondly, there is the failure of Villard Vitalis to provide updated contact information where the Commission, not to mention his counsel, could reach him.

It should be remembered that when Villard Vitalis brought this claim the accident benefit scheme in Ontario required that his insurer respond within a short timeline or risk accepting his claim at face value by default.

Villard Vitalis, by bringing this arbitration triggered significant expenditures of time and resources by Intact to respond to his claim. By failing to withdraw, while doing nothing to bring his claim along and dragging out the arbitration process due to non-compliance with the Code and the Insurance Act, he ensured that Intact would continue to incur further costs, including those related to this motion to dismiss.

The Dispute Resolution Practice Code at Rule 68 deals with the dismissal of matters that are found to be “frivolous and vexatious”. It reads as follows:

Dismissal of proceeding without hearing

68.1 Subject to Rule 68.2, an adjudicator may dismiss a proceeding without a hearing where the proceeding is frivolous, vexatious, or is commenced in bad faith.

68.2 Before dismissing a proceeding under this Rule, an adjudicator shall deliver written notice to all parties of the intention to dismiss the proceeding on the grounds set out in Rule 68.1.

The Code does not define frivolous or vexatious.

“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).

Rule 68 of the Code does 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 Armstrong J. in Currie (Currie v. Halton (Region) Police Services Board 2003 CanLII 7815 (ON CA), [2003] O.J. No. 4516 C.A.) where he remarked, “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 Rule 68.1 should not be interpreted in a like manner.

Consequently, I find that given Mr. Villard Vitalis’ failure to participate in this hearing process and the consequent impossibility of success, Intact is entitled to an order dismissing the accident benefit claims filed by Villard Vitalis.

I note that this dismissal was not arrived at lightly. Mr. Vitalis was given many opportunities to participate and great efforts were made to contact him and advise him of both the necessity of participating, and the consequences if he did not. While the accident benefit scheme has been seen as consumer friendly, it still requires some commitment on the part of claimants to carry through with their obligations under the Code, once they have entered the arbitration process.

This, Mr. Vitalis was patently unwilling to do. The consequence is the dismissal of his claim for accident benefits.

EXPENSES:

Given that Mr. Villard Vitalis has failed to appear in this process despite notice, pursuant to section 7 of the SPPA he is not entitled to any notice of further stages including the determination of the expense issue.

With the default of Mr. Vitalis and the complete success of Intact, as well as the apparent absence of any mitigating circumstances, Intact is entitled to its reasonable expenses in this matter.

Intact shall file its expense summary within 30 days, failing which I will assume that it has waived its right to expenses.

April 29, 2015

John Wilson Arbitrator

Date

ARBITRATION ORDER

Financial Services Commission of Ontario