Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2016 ONFSCDRS 130
Appeals P16-00016A and P16-00016C
OFFICE OF THE DIRECTOR OF ARBITRATIONS
LAAVANYAN SANGARALINGAM
Appellant / Cross-Respondent
and
TD GENERAL INSURANCE COMPANY
Respondent / Cross-Appellant
BEFORE:
Delegate Richard Feldman
REPRESENTATIVES:
David Silverstone for TD General Insurance Company (the “Insurer”)
David S. Wilson for Mr. Sangaralingam (the “Insured”)
HEARING DATE:
Written submissions were received by April 13, 2016
Oral submissions were received April 21, 2016 by teleconference
PRELIMINARY APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The Insurer’s request for a stay of the February 4, 2016 order of Arbitrator Osunde is denied.
The issue of each party’s expenses related to this request for a stay is deferred to the conclusion of the appeal, subject to any further or other order of an appellate officer.
April 27, 2016
Richard Feldman
Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
The Insured, Mr. Laavanyan Sangaralingam, was involved in a motor vehicle accident on June 15, 2007. About two years earlier (on March 5, 2005), the Insured had been involved in a motor vehicle accident in which he sustained a brain injury. It does not appear to be in dispute that the Insured was still suffering impairments from the 2005 accident at the time of the 2007 accident. After the 2007 accident, Mr. Sangaralingam applied for statutory accident benefits from the Insurer, TD General Insurance Company. Disputes arose concerning the Insured’s entitlement to certain benefits. Those disputes proceeded to arbitration at the Financial Services Commission of Ontario (“FSCO”) in 2015. By order dated February 4, 2016, Arbitrator Osunde ordered the Insurer to pay for some of the goods and services that were in dispute and to pay for the cost of a catastrophic impairment assessment, plus interest on the overdue payment of benefits. The Arbitrator, however, dismissed the Insured’s claims for the following: the cost of occupational therapy recommended in a plan dated December 30, 2009; the cost of specified case management services; and, a special award.
The Insured appealed the Arbitrator’s denial of the cost of occupational therapy recommended in a plan dated December 30, 2009, the cost of case management services and a special award.
The Insurer then filed a cross-appeal, challenging the parts of that order awarding any benefits to the Insured, primarily upon the grounds that the Arbitrator erred in law by misapprehending or applying the wrong test for causation (“material contribution” rather than “but for”) and in determining that the Insured’s impairments were caused by the 2007 accident.
II. REQUEST FOR STAY
Pending a final determination of this appeal, the Insurer has requested a stay of part of the Order of February 4, 2016 (i.e., a stay of the Arbitrator’s finding of causation and, correspondingly, her order at paragraphs 1, 4, 5, 6 and 8).
Subsection 283(6) of the Insurance Act, R.S.O. 1990, c. I.8, provides that an appeal does not stay the order of an arbitrator, unless decided otherwise. The onus is on the moving party to establish that the exceptional order of a stay of the arbitration order is justified. The parties agree that, based upon existing case law,1 the following criteria ought to be considered in determining whether or not to exercise such discretion:
The bona fides of the appeal;
The substance of the grounds for appeal; and,
The hardship of the respective parties if the stay is granted or refused.
III. SUBMISSIONS ON REQUEST FOR STAY
The bona fides and substance of the grounds for appeal
The Insurer states that there is a genuine, bona fide and important issue of law raised in its appeal -- that is, “What is the correct legal test for causation in accident benefits cases in Ontario?” The Insurer submits that recent case law casts doubt on the Arbitrator’s conclusion that the “material contribution” test is the test for causation in claims for statutory accident benefits. The Insurer submits that if the hearing Arbitrator had applied the “but for” test, on the facts before her, she would have concluded that the accident of June 15, 2007 was not the direct cause of the impairments that formed the basis of Mr. Sangaralingam’s claims for benefits as against this Insurer.
The Insured questions both the bona fides of the Insurer’s appeal and its strength. The Insured submits that the order requiring the Insurer to pay for a catastrophic impairment assessment did not turn upon the issue of causation. Also, it is submitted that the preponderance of cases agree that the test for causation in accident benefit claims is that of “material contribution” and that there are good reasons for a less strict approach to causation under a no-fault insurance regime. In the alternative, even if the “but for” test is the default test for causation (which is not admitted but is specifically denied by the Insured), the “material contribution” test can be employed in certain circumstances and, given the significant pre-accident medical history of the Insured and the other factors that may have played a role in his disability, this was an appropriate case for the application of the “material contribution” test. It is further argued that even under a “but for” test, the Applicant would have succeeded on the facts of this case. Finally, the Insured argues that there was a factual basis for the Arbitrator’s determination that the 2007 accident caused an exacerbation of the Insured’s pre-existing condition and that this is sufficient to establish causation. For these reasons, the Insured submits that the appeal by the Insurer is actually fairly weak.
Hardship
The Insurer does not wish to have to pay out monies pursuant to the order that is under appeal while the appeal is pending. It acknowledges, however, that this is not its strongest argument since this is true in every case where an insurer seeks to appeal an order for the payment of money. The Insurer concedes that a stay of an order pending an appeal at FSCO remains an exceptional, discretionary remedy. Nevertheless, the Insurer submits that its appeal has sufficient merit and that the central legal issue is sufficiently important that this ought to weigh in favour of granting the requested stay even if the risk of hardship to the Insurer is not great.
The primary concern of the Insurer seems to be the possible prejudice to it, should it be bound by findings in the February 4, 2016 decision of the hearing arbitrator (in particular, findings about causation). The Insured has commenced a separate arbitration proceeding (FSCO A15-008693) for a determination as to whether he sustained a catastrophic impairment as a result of the accident of June 15, 2007. That case is currently scheduled to proceed to a pre-hearing conference in June 2016. It is unlikely to be set down for a hearing prior to some point in 2017. The Insurer is concerned that if the Order of February 4, 2016 is not stayed, the Insurer might be estopped from raising causation as an issue in that arbitration proceeding.
The Insurer is also concerned that between now and when this appeal is decided, the Insured may submit new claims for accident benefits. If the Order of February 4, 2016 is not stayed and the Insurer denies such a claim on the basis that the 2007 accident did not cause the impairment in question (contrary to the finding of Arbitrator Osunde), the Insurer may be exposed to a claim for a special award for unreasonably denying a benefit.
Counsel for the Insured submits that specific evidence of hardship to an insured person need not be introduced since hardship is presumed when:
the insured person has been waiting for many years for money needed to obtain reasonable and necessary goods and services;
the insured person finally obtains an order for those goods and services after a full hearing of the merits of his or her claim; and then
the insurer seeks a stay that will have the effect of further delaying either receipt of the needed goods and services or compensation for same.
It is also submitted that the potential hardship raised by the Insurer is purely speculative at this point as there are currently no outstanding treatment plans in dispute and this appeal is likely to be resolved well before the pending arbitration proceeding (concerning catastrophic impairment) ever comes to a hearing.
IV. ANALYSIS
The Insurer has raised an important legal issue in its appeal. Based upon the information currently available to me, I am satisfied that the appeal is bona fide.
The strength of the appeal is less clear. For instance, both parties will likely be able to advance strong arguments concerning whether the Arbitrator used the wrong test for causation in this case and concerning whether, on the facts of this case, the application of the “but for” test would have resulted in a different outcome. Those will be issues that I expect the parties will address on the hearing of the merits of this appeal.
As with many cases, the most important factor is one of hardship and the onus is upon the party seeking the stay (in this case, the Insurer) to demonstrate that it is appropriate to grant such an order in light of all of the circumstances, including the risk of hardship to the parties if a stay is granted or refused.
Arbitrator Osunde found as a fact that Mr. Sangaralingam’s cognitive and executive functioning worsened as a result of the 2007 accident. She found that many of the goods and services in dispute (most of which date back to 2009 and 2010) were reasonable and necessary. Other than the risk that it will be unable to obtain repayment of amounts paid pursuant to the arbitral decision should that decision be overturned, there is no evidence of any imminent hardship faced by the Insurer. I accept the Insured’s submissions that the potential hardship raised by the Insurer is purely speculative. I am not satisfied that this outweighs the hardship to the Insured if a stay were to be granted at this time.
For these reasons, the Insurer’s request for a stay of the February 4, 2016 order of Arbitrator Osunde is denied. This decision is made without prejudice to the Insurer to renew its request for a stay should there be a material change in circumstances pending the determination of this appeal.
V. EXPENSES RELATED TO REQUEST FOR STAY
The issue of each party’s expenses related to this request for a stay is deferred to the conclusion of the appeal, subject to any further or other order of an appellate officer.
April 27, 2016
Richard Feldman
Director’s Delegate
Date