Financial Services Commission of Ontario

Commission des services financiers de l'Ontario

Neutral Citation: 2016 ONFSCDRS 191

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: Richard Feldman

REPRESENTATIVES: David Silverstone and Rory Wasserman for TD General Insurance Company David S. Wilson for Mr. Sangaralingam Alexander M. Voudouris and Stanley Pasternak for the Ontario Trial Lawyers Association

HEARING DATE: By written submissions received by July 4, 2016

PRELIMINARY APPEAL ORDER (#2)

Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, and under Rule 59 of the Dispute Resolution Practice Code, it is ordered that:

The Ontario Trial Lawyers Association ("OTLA") may intervene in this appeal on the sole issue of causation, on such terms and conditions as I shall establish after further submissions from OTLA, the parties and any other interveners.
The parties have 10 days in which to deliver any written submissions concerning my proposal to request Canadian Defence Lawyers to intervene.

July 14, 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 ("TD" or "the Insurer"). Disputes arose concerning Mr. Sangaralingam'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 benefits to the Insured, relying upon several grounds, including its submission that the Arbitrator erred in law by misapprehending or improperly applying the test for causation and in determining that the Insured's impairments were caused by the 2007 accident.

II. PREVIOUS PRELIMINARY APPEAL ORDER

In its cross-appeal, the Insurer requested a stay of the February 4, 2016 order of Arbitrator Osunde. After receiving written and oral submissions from the parties, I denied that request in my interim order of April 27, 2016.

III. REQUEST TO INTERVENE

In its Notice of Appeal and subsequent written submissions (for example, pages 35-43 of the TD's June 6, 2016 written submissions), TD alleges that the hearing arbitrator erred in law by concluding that the test for causation in accident benefits cases is that of "material contribution" and by not first attempting to apply the "but for" test of causation. TD also appears to allege that even in cases where it is appropriate to apply the "material contribution test," the insured person must prove that the motor vehicle accident was a necessary, material and sufficient cause of the impairment in question. Thus, in its cross-appeal, TD has raised not only broad legal issues as to the test or tests for causation that ought to be applied in accident benefits cases but also issues as to the circumstances under which it is appropriate to resort to the "material contribution" test and how that test ought to be interpreted and applied.

During a preliminary teleconference with the parties on April 21, 2016, Mr. Wilson, counsel for Mr. Sangaralingam, submitted that the issues raised by the Insurer with respect to determination of causation in accident benefits cases were important ones with implications well beyond the accident benefits in dispute in this particular case. Mr. Wilson suggested that others might seek to intervene with respect to these important and far-reaching legal issues related to determinations of causation within the context of disputes over no-fault accident benefits.

On June 21, 2016, an application was received from the Ontario Trial Lawyers Association ("OTLA") seeking to intervene in these appeals. The Application provides a brief description of OTLA, its reasons for applying to intervene and its position with respect to the correct test for causation in accident benefits cases. Essentially, it is OTLA's position that this issue (i.e., the test(s) of causation in accident benefits cases and how to interpret and apply such test(s)) is an issue of great importance that "extends beyond Mr. Sangaralingam to all accident victims..." As an organization made up of over 1,500 trial lawyers who represent injured persons, both in accident benefits and tort cases, OTLA submits that it has a breadth of experience and a perspective that may be of assistance to the presiding Director's Delegate in interpreting the relevant case law.

IV. AUTHORITY TO PERMIT INTERVENTIONS

Subsection 283(8) of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, provides that the "Director may permit persons who are not parties to the appeal to make submissions on issues of law arising in an appeal." My appointment as Director's Delegate, pursuant to subsection 6(4) of the Insurance Act, authorizes me to hold hearings on behalf of the Director and to exercise the powers and perform the duties of the Director relating to such duties.

Rule 59 of the Dispute Resolution Practice Code (the "Code"), provides as follows:

59.1 The Director may request persons who are not parties to an appeal to make submissions on any issue of law arising in an appeal, and participation will be on such terms as the Director considers appropriate.

59.2 Persons who are not parties to an appeal may apply to make submissions on an issue of law arising in an appeal.

59.3 A person who wishes to make submissions on an issue of law arising in an appeal must:

(a) complete an Application for Intervention in FORM K;

(b) serve a copy of the Application on the representative of each of the parties to the appeal or, if a party is not represented, on the party; and

59.4 An Application for Intervention may be rejected if it does not include:

(a) the applicant's reasons for wishing to participate; and

(b) a summary of the applicant's submissions on the issues of law.

59.5 Where an Application for Intervention is rejected, the Director will notify the applicant and the representative of each of the parties to the appeal or, if a party is not represented, the party.

59.6 Within 10 days of receiving an Application for Intervention, a party may indicate that he or she supports or objects to the intervention by:

(a) filing his or her written comments; and

(b) sending a copy of his or her written comments to the representative of the applicant or, if not represented, to the applicant.

V. CASE LAW

While Rule 59 of the Code addresses interventions, it provides no criteria for determining when to permit an intervention. There have been relatively few cases where intervention has been permitted at FSCO; thus, there is limited guidance on appropriate criteria.

While not bound by the Rules of Civil Procedure, some Delegates have found it helpful to consider the circumstances in which the Superior Court will permit a non-party to intervene either as a party or as a friend of the court. These factors were considered by the Director of the Ontario Insurance Commission ("OIC", the predecessor to FSCO) in the case of Vo and Maplex ("Vo").¹ There is no legal requirement, however, that a party seeking to intervene in a FSCO proceeding meet the strict criteria of an amicus (friend of the court) and, having reviewed the cases filed by TD, I find that decisions of the courts on this issue are of limited assistance in the application of s. 283(8) of the Insurance Act.

In Vo, an insured person challenged the method used by the hearing arbitrator in calculating income replacement benefits. The Insurer submitted that the interpretation adopted by the hearing arbitrator was the correct one (although this interpretation conflicted with previous decisions of other arbitrators) and that, in any event, stare decisis did not apply at the OIC. It is in this context of conflicting (or confusing) case law that the Insurance Bureau of Canada ("IBC") sought to intervene on the basis that both the issue of the proper method of calculating income replacement benefits and the issue of whether the principle of stare decisis applied at the OIC were important legal issues, with implications beyond the immediate arbitration proceeding between these two parties.

In deciding whether to permit the IBC to intervene, Director Sachs suggested that an Application for Intervention should be favourably considered where²:

(1) the arguments or submissions to be made by the intervener relate directly to an issue of law which has a broader implication than the immediate one affecting the parties to the appeal;

(2) the nature of the intervener, whether an individual, organization or corporation, including their special expertise, giving a wider perspective on the issue;

(3) the intervener's ability to put forward or advance a point of view distinct or different from those of the parties; and

(4) the Director believes the ultimate outcome of the case may have an implication beyond the immediate interests of the parties.

Director Sachs makes it clear in her decision that the criteria set out above are not meant to be exhaustive, that not every criterion need be met and that this list is meant only to be a guide as to what "may be considered relevant in exercising the discretion to permit an intervention".³ Director Sachs did permit the IBC to intervene and make submissions.⁴

In Persofsky,⁵ the principle legal issues at stake were the correct interpretation and application of the provisions of the Insurance Act related to the granting of a special award and an allegation by the insurer against FSCO of institutional bias. These were issues that had potential implications well beyond the interests of the parties in this one case. Both OTLA and the IBC sought and were granted permission to intervene. In allowing both interventions, however, Director Draper imposed certain conditions on these interveners, including:

Setting parameters on the scope of submissions ("to make legal submissions on the issue of special award and institutional bias");
Clarifying the role of the interveners ("to present arguments based on their unique knowledge and perspective, not simply to support the position of one party or the other");
With respect to expenses, making it clear that the interveners would be responsible for their own expenses as well as any additional disbursements resulting from their involvement; and
Generally, that the interveners would not be allowed to complicate or delay the proceedings to any significant extent.

Subsequently, the Ministry of Finance was also permitted to intervene on the institutional bias issue. Then a private individual (Mr. Spiegel) sought to intervene. Utilizing the criteria suggested in Vo, Director Draper rejected Mr. Spiegel's application to intervene because: (1) he was not representing the interests of any recognized group; (2) the issues he sought to raise were different from those of the parties and were likely to complicate the proceedings (for example, Charter issues); and (3) the Director was not satisfied that this individual would be able to make a useful contribution to the appeal.

In Danilov,⁶ the applicant was a passenger in a vehicle that was involved in an accident. The pink Motor Vehicle Liability Insurance Card indicated that Unifund was the insurer for this vehicle. Mr. Danilov relied upon this and submitted a claim for accident benefits to Unifund. Unifund declined to accept this application because it had not in fact insured the vehicle. As it turns out, the pink slip was fraudulent but there was no evidence that Mr. Danilov was aware of this fact. On these facts, the hearing arbitrator found that there was a "sufficient nexus" between Mr. Danilov and Unifund and that Unifund was required to accept Mr. Danilov's application and deal with his claims.

On appeal by Unifund, the IBC sought to intervene, arguing that the issue of what constitutes a "sufficient nexus" was an important one with implications for the entire auto insurance industry, that the IBC had been permitted to intervene in other FSCO/OIC cases and that its submissions would be different from those of the parties. Economical Mutual Insurance Company ("Economical", the insurer of the other vehicle in the accident) had been allowed to intervene in the original arbitration proceeding; it also sought to intervene in the appeal. Economical also opposed intervention of the IBC on the basis that IBC submissions were not likely to be different from those of Unifund and Economical, both of which were members of the IBC.

Director's Delegate Blackman permitted intervention by both Economical and IBC, on certain terms. He held that, in considering whether to exercise discretion to permit an intervention, an Appeals Officer (i.e., Director's Delegate) is not restricted to the criteria listed in the Vo decision. Delegate Blackman permitted Economical to intervene since it could be directly, adversely affected by the outcome of the proceeding. He permitted IBC to intervene in the hopes that it could provide a wider perspective on a specific aspect of the appeal.

Ultimately, the decision of whether to permit intervention under Rule 59 involves the exercise of discretion on the part of a Director's Delegate. It involves weighing the potential usefulness of obtaining a broader perspective by permitting a non-party to intervene against the potential prejudice to the parties (such as delay or additional legal expense) and the extent to which any such prejudice can be minimized by the imposition of appropriate conditions. Of course, the wishes of the parties should also be taken into consideration but the decision remains that of the presiding Director's Delegate.

VI. SUBMISSIONS OF THE PARTIES

Pursuant to Rule 59.6, I permitted both parties 10 days to indicate whether they supported or objected to the intervention.

By letter dated July 4, 2016, Mr. Wilson advised that Mr. Sangaralingam supported OTLA's request to intervene (for the reasons set out in Schedule "A" to OTLA's Application).

By submission dated July 4, 2016, Mr. Silverstone and Mr. Wasserman (both counsel for TD), advised that TD objected to this intervention. Its reasons for objecting include the following:

OTLA has failed to demonstrate that this is an exceptional case warranting their involvement;
The ultimate outcome of this case does not have an implication beyond the immediate interests of the parties;
OTLA has failed to provide a summary of its submissions on the issues of law;
OTLA's proposed intervention is an abuse of process as it amounts to a collateral attack on the Court of Appeal's decision in Blake;⁷
OTLA has failed to reassure TD that its desire to intervene is for purely altruistic reasons;
OTLA may attempt to make submissions not just on law but also related to the facts of this case;
OTLA has failed to demonstrate that its participation will enhance the adjudicator's ability to determine questions of law at issue;
OTLA's intervention would greatly expand the scope and complexity of this appeal which would likely result in additional cost and delay to the parties.

VII. ANALYSIS

Recent court and FSCO decisions may have created uncertainty amongst legal professionals and arbitrators as to how to approach causation issues in accident benefits cases. There may be conflicting cases from the Court of Appeal, depending upon how one interprets that Court's decisions in Monks⁸ and Blake. It is TD that has raised this legal issue as one of the central issues in its cross-appeal.

This is obviously a legal issue of very broad interest and has potential implications well beyond the dispute between Mr. Sangaralingam and TD. The significance and scope of this issue is only reinforced by TD's submissions on the importance and general application of the Court of Appeal's decision in Blake.

OTLA is a recognized group that I anticipate will be able to provide helpful submissions from a broader perspective on general legal principles relevant to the appropriate test or tests for causation in accident benefits cases. It is open to both the parties and any intervener to make submissions as to how the Court of Appeal's decision in Blake ought properly to be interpreted and applied. Contrary to the position taken by TD, I do not find that the making of such submissions automatically constitutes an abuse of process.

Rule 59.4 of the Code provides that an Application for Intervention may be rejected if it does not include a summary of its submissions on the issues of law. In Schedule "A" to its Application to Intervene, OTLA suggests that the "material contribution" test ought to apply in accident benefits cases due to the consumer protection nature of the Statutory Accident Benefits Schedule ("SABS"). OTLA also submits that the "but for" test, although the primary test for causation in tort cases, is "not applicable to SABS". Thus, it appears to me that OTLA has provided a summary of its submissions. OTLA's submissions, however, are very brief and obviously need to be supplemented well in advance of the hearing of this appeal. For example, as pointed out by TD, OTLA's brief submissions do not address the Court of Appeal's decision in Blake. Rule 59.4 of the Code states that if an Application for Intervention fails to include a summary of the applicant's submissions on the issues of law, it may be rejected; Rule 59.4 does not state that the application must be rejected. In this case, I find that I have sufficient information about the position that OTLA will be taking to decide whether it ought to be permitted to intervene in this appeal.

In short, I am persuaded that the intervention of OTLA is likely to be of assistance to me in my analysis of this important and far-reaching legal issue.

As for balancing the potential usefulness of obtaining such submissions against the potential prejudice to the parties, I note that Mr. Sangaralingam consents to this intervention and has not raised any allegation of potential prejudice to him. As for the concerns of TD (i.e., that OTLA's intervention will greatly expand the scope and complexity of this appeal, which may result in additional cost and delay to the parties), I believe that I can minimize any prejudice by imposing appropriate conditions on the scope, timing and method of making submissions and related to any additional expenses that may result from this intervention.

VIII. CONCLUSION

For the reasons set out above, I shall permit OTLA to intervene in this matter, solely on the issue of causation, provided that it complies with terms that I shall establish after permitting further submissions from OTLA and the parties.

As I advised the parties in my letter of June 27, 2016, since OTLA is made up of lawyers who represent plaintiffs/applicants, in the interests of fairness and balance, I am inclined to also permit intervention by a group comprised of defence counsel. Pursuant to Rule 59.1 of the Code, I am considering inviting Canadian Defence Lawyers to intervene. The parties shall be permitted 10 days from the date of this decision to deliver any written submissions concerning potential intervention by Canadian Defence Lawyers.