Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2016 ONFSCDRS 10
Appeal P15-00050
OFFICE OF THE DIRECTOR OF ARBITRATIONS
YUN ZHANG
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
BEFORE: David Evans
REPRESENTATIVES:
Alyson Toms for Mr. Yun Zhang
Harry Brown for State Farm Mutual Automobile Insurance Company
HEARING DATE: December 16, 2015 by teleconference
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
This appeal is allowed. Paragraphs 1 and 3 of the Arbitrator’s July 2, 2015 Order and Results #1 and #3 of his decision are rescinded.
If the parties are unable to agree on the legal expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code, (Fourth Edition, Updated – January 2014).
January 13, 2016
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Mr. Yun Zhang appeals Arbitrator Musson’s order of July 2, 2015 ordering Mr. Zhang to submit to State Farm’s request for an Examination Under Oath (EUO) pursuant to s. 33(1.1) of the SABS–19961 and staying the arbitration hearing pending the attendance at the EUO.
II. BACKGROUND
Mr. Zhang was injured in a motor vehicle accident on June 1, 2009. Various benefits including income replacement benefits were paid but then terminated, leading to the arbitration. Mr. Zhang refused State Farm’s request for an EUO unless the benefits were reinstated.
State Farm brought a motion seeking an order requiring Mr. Zhang’s attendance. Subsection 33(1.1) of the SABS provides that if requested by the insurer, a person who applied for a benefit under the SABS as a result of an accident shall submit to an examination under oath, within stated restrictions. Subsection 33(2) of the SABS states, in part, that the insurer is not liable to pay a benefit in respect of any period during which the insured person failed to comply with s. 33(1.1).
In his decision, the Arbitrator noted that “recent decisions have ruled in favour of the Insurer’s right to have an Applicant attend an Examination Under Oath.” He referred to cases such as Singh and State Farm Mutual Automobile Insurance Company, (FSCO A12-007594, August 22, 2014) and Michaud et al. and State Farm Mutual Automobile Insurance Company, (FSCO A11-004437, A11-004496 and A11-004497, March 5, 2014 and June 27, 2014). He found that “there are some document productions that the Insurer has requested that are missing. Therefore, one way for State Farm to properly adjust Mr. Zhang’s file is through an Examination Under Oath. It is for these reasons that I am ordering Mr. Zhang make himself available to attend an EUO.”
Accordingly, he ordered Mr. Zhang to attend the EUO and adjourned the hearing sine die pending his attendance.
III. ANALYSIS
I find the Arbitrator erred in ordering Mr. Zhang to attend the EUO. He had no power to do so. Indeed, Arbitrator Wilson in Michaud, the case the Arbitrator relied on, stated that he had no power to compel an applicant to attend an EUO. While the Arbitrator in Singh did make such an order, the main point at issue in that case was whether an EUO is available after the initial adjustment period, so the Arbitrator did not discuss the power to compel. Furthermore, in State Farm Mutual Automobile Insurance Company and Williams, (FSCO P15-00001, July 17, 2015), the Insurer requested that I make an order that Mr. Williams attend at an EUO, but I stated “I have no power to order such attendance. State Farm has the right to suspend payment pending his attendance in any event.” As Delegate Blackman put it in Troubitsine and TTC Insurance Company, (FSCO P09-00019, January 14, 2010), “It is difficult to discern what could be more draconian in this context than the non-entitlement to benefits in respect of any period of non-compliance with subsection 33(1.1).”
I find the Arbitrator also erred in ordering a stay. In Troubitsine, a stay had also been ordered and was overturned on appeal. As Delegate Blackman stated, the Arbitrator confused the adjusting process with the adjudicative process. That is what the Arbitrator did here when he ordered the stay to assist State Farm’s adjusting of the file. As set out in Troubitsine, our processes do not include examinations for discovery, the available remedy of suspending benefits already adequately addresses fairness between the parties, there is no authority to rewrite s. 33 to fashion a more adequate remedy anyway, and there are many other steps available in the process to deal with noncompliance regarding documentary production and other hearing-related issues.
The appeal is therefore allowed. Mr. Zhang is not required to attend the EUO, and the arbitration hearing is not adjourned.
IV. EXPENSES
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.
January 13, 2016
David Evans Director’s Delegate
Date