Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 197

FSCO A15-005944

BETWEEN:

SHANICE CLARKE-HUNTER

Applicant

and

WESTERN ASSURANCE COMPANY

Insurer

Before: Arbitrator Louise Barrington

Heard: In person at ADR Chambers on April 27, 2016

Appearances: Ms. Shanice Clarke-Hunter did not participate Ms. Kate Mazzucco participated for Ms. Shanice Clarke-Hunter Mr. Rajiv Haté participated for Western Assurance Company

Issues:

The Applicant, Ms. Shanice Clarke-Hunter, was injured in a motor vehicle accident on September 30, 1998 and sought accident benefits from Western Assurance Company (“Western”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Clarke-Hunter, through her representative, 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 Motion are:

Is the Insurer entitled to an Order dismissing this Application for Arbitration, or alternatively, an Order staying the proceeding?
Is either party entitled to its expenses of this Motion?

Result:

The Motion for an Order dismissing this Arbitration is denied. The Applicant, Ms. Shanice Clarke-Hunter, is entitled to proceed on her claim for benefits under the Schedule.
The question of expenses of this Motion is deferred to the Hearing Arbitrator.

EVIDENCE AND ANALYSIS:

Procedural History

The Arbitration proceeding within which this Motion is brought arises out of a motor vehicle accident on September 30, 1998 in the City of Mississauga in the Region of Peel. The Applicant was nearly three years old when she entered the roadway on foot, and was struck by a passing car driven by Alan Keith Richardson and owned by W. Emerson Richardson. Shanice suffered serious injuries, including a fracture to the base of her skull. She was admitted to Mississauga Hospital. Today she has substantially recovered from her injuries, to the extent that she is able to attend university courses. At the date of this Motion, Shanice is 20 years old.

Shanice’s then lawyer, Nancy Ralph, submitted an Application on her behalf for accident benefits (OCF 1 of October 13, 1998). While it is unclear to whom the OCF was submitted - the space for the addressee being blank - a priority dispute ensued between Royal & SunAlliance Insurance Company of Canada (RSA), Dominion of Canada General Insurance Company (Dominion) and the Motor Vehicle Accident Claims Fund (MVACF), which dispute is ongoing today. The Application for Accident Benefits was not pursued at that time.

On August 31, 2000, Nancy Ralph issued a Statement of Claim in Superior Court on behalf of Shanice and her mother, Ann Clarke, and served it on the named defendant, Alan Keith Richardson.

In September of 2008, Shanice changed lawyers, engaging Lerners LLP. A Notice of Change of Lawyers was filed in the court action on May 7, 2014.

A Statement of Defence, Counterclaim and Crossclaim, dated December 9, 2011, was filed by the Ministry of the Attorney General, on behalf of the Defendant Alan Keith Richardson and the Estate of W. Emerson Richardson, deceased.

With leave granted on June 13, 2012 by Master Brott, on July 10, 2014, Shanice’s counsel filed an Amended Statement of Claim adding as party defendants the Estate of W. Emerson Richardson, RSA and Dominion.² The Amended Statement of Claim added the following claims for relief:

Paragraph 1

(d) A declaration that Royal and SunAlliance Canada Group and/or The Dominion of Canada General Insurance Company are obliged to provide statutory accident benefit coverage to Shanice Clarke-Hunter

(e) In the alternative, if neither Royal & SunAlliance Canada Group nor The Dominion of Canada General Insurance Company are required to pay statutory accident benefits, a declaration that Her Majesty the Queen be required to pay statutory accident benefits coverage to Shanice Clarke-Hunter, pursuant to the provisions of the Motor Vehicle Accident Claims Act, in conjunction with s.268 of the Insurance Act;

(f) A declaration that Shanice Clarke-Hunter and Ann Clarke qualify for uninsured automobile coverage and/or family protection coverage from Royal & SunAlliance Canada Group and The Dominion of Canada General Insurance Company, either collectively or individually.

Paragraph 4

The Plaintiffs state that th[e] Defendant was an inadequately insured motorist. The defendant, the Estate of W. Emerson Richardson, deceased at all relevant times was the owner of the Defendant motor vehicle…and as such is liable for the negligence of Alan Keith Richardson.

Paragraph 5

The Defendant Royal & SunAlliance…acquired the interests of the Western Assurance Company, Lumbermens Mutual Group and Kemper Insurance Companies, and as such is now responsible for any and all claims arising from any previous policies of insurance by which Shanice Clarke-Hunter was an insured, namely policy no. WAH030430969 or policy no. U2567753.

Paragraph 6

The Defendant Dominion of Canada General Insurance Company… In the alternative to Royal and SunAlliance, Dominion provided a policy of insurance through which Shanice Clarke-Hunter was an insured, namely policy no.40892611.

Paragraph 7

The Plaintiffs state that Shanice Clarke-Hunter is entitled to uninsured motorist coverage and/or family protection coverage from Royal & SunAlliance and/or Dominion, either individually or collectively.

Paragraph 17

The Plaintiffs plead, as against Royal & SunAlliance and Dominion, that they are entitled, pursuant to the provisions of the Insurance Act, RSO 1990, c I.8, as amended, and applicable insurance policies in place that afforded coverage to the Plaintiffs, to make a claim to the extent of any applicable limits in the event that the Richardson Defendants were inadequately insured motorists.

Master Brott’s Order was subsequently reviewed by Mr. Justice Frank. In Mr. Justice Frank’s Endorsement of April 4, 2013, he dismissed the Insurer’s appeal requesting that he set aside the Master’s Order granting leave to amend her claim, and found that there was not an existing Application for Accident Benefits: “While a form was submitted to the Motor Vehicle Accident Claims Fund in October of 1998, MVACF took the position that it was incomplete and the plaintiffs did not pursue their application.” Mr. Justice Frank found that the Master did not err in allowing the plaintiffs to amend to seek a declaration that the appellants are required to pay mandatory statutory accident benefits; he held that to deny the minor plaintiff the opportunity to pursue a claim for accident benefits would be to deny her procedural fairness.³

On August 20, 2014, the Statement of Defence and Crossclaim of the Defendant, Dominion of Canada General Insurance Company, was filed. In it, Dominion denied that Shanice was a person insured under whatever contract of insurance may have been issued by it; that she was not an eligible claimant with respect to family protection coverage; and that she had no right in law to claim against Dominion under section 265 of the Insurance Act or the family protection endorsement, and it stated that the limitation period for adding a party as a defendant had expired.⁴ Dominion also pleaded that Shanice was entitled to recover damages with respect to an uninsured motorist.

In August 2014, Shanice submitted to RSA the four treatment plans which are in issue in this Arbitration. She claimed the following medical benefits, all proposed or provided by Rehab First:

$3698.11 for speech language pathology services;
$2023.13 for social work sessions;
$2922.23 occupational therapy; and
$1935.08 for a MacBook Pro computer and software, already incurred.

RSA denied these four treatment plans on September 11, 2014. The denial letter read in part:

The Accident Benefits claim was submitted in September of 2013. It is presently 16 years post accident. No Treatment Plans have been submitted prior to this one. There is no indication that treatment/services for educational assistance were required prior to this treatment plan. Also we are not in receipt of up-to-date medical information.⁵

On January 16, 2015, in the court action, the Ministry of the Attorney General filed the Statement of Defence, Counterclaim and Crossclaim of Alan Keith Richardson and the Estate of W. Emerson Richardson, deceased. In it, the Richardson Defendants, relying on section 267.5 of the Insurance Act, denied that Shanice was entitled to claim any health care expenses or other medical expenses.

The Richardsons’ position is that, if Shanice was entitled to claim such benefits, the benefits should be against Dominion, whose policy of insurance was in full force and effect, Shanice being a dependent relative of her mother, Ann, and her grandmother, Deloris, and thus entitled to statutory benefits under that policy.

On January 26, 2015, RSA filed its Statement of Defence Counterclaim and Crossclaim, denying that Shanice was an uninsured under the policies issued by Western Assurance and pleading (among other things) that section 267.5 of the Insurance Act bars recovery of damages, particularly health care expenses and other medical expenses. RSA further alleges that as a dependent relative of her mother and grandmother, Shanice is entitled to statutory benefits of her grandmother Deloris’ Dominion policy.

On February 9, 2015, Mr. Justice Dunphy ordered that the Ministry of Finance be removed as representative of Alan Keith Richardson; that Luke Sneyd, Estate Trustee of the Estate of Alan Keith Richardson, be added as a Defendant in substitution; and that all pleadings to date be served on Mr. Sneyd’s counsel, Nuwanthi C. Jayatunge. He lifted a stay of proceedings which had apparently been in place at that time. On July 22, 2015, Mr. Jayatunge assumed representation of Alan Keith Richardson.⁶

On September 25, 2015, the Ministry of Attorney General delivered an Amended Statement of Defence, Counterclaim and Crossclaim on behalf of the Estate of W. Emerson Richardson.⁷

On March 10, 2016, Cameron Fiske of Milosevic Fiske LLP was engaged to represent Luke Sneyd, Estate Trustee of the Estate of Alan Keith Richardson, and filed a Statement of Defence, Counterclaim and Crossclaim.⁸

On April 6, 2016, the Ministry of the Attorney General delivered an Amended Statement of Defence on behalf of the Estate of W. Emerson Richardson.⁹

The Superior Court action thus involves six parties, two of whom are deceased, including the driver of the motor vehicle that struck Shanice. The issues include liability of the driver and the owner of the motor vehicle; a consent issue between driver and owner (the registered owner W. Emerson Richardson having passed away in 1995, prior to this accident); contributory negligence alleged on the part of Shanice’s mother, Ann; quantum of damages for Shanice and for Ann; and underinsured or family protection coverage. According to the Affidavit filed by Laura Sardella,¹⁰ the Superior Court action has not yet reached discovery, with examinations scheduled in July and September 2016. Likewise, Shanice has not undergone medical assessments, and neither the mandatory mediation nor the pre-trial conference has yet been arranged. Ms. Sardella states that long Hearings in the City of Toronto are currently being set for 2018.¹¹ The two insurance companies, RSA and Dominion, along with the MVACF, are still involved in the priority dispute to determine which of them is to have future responsibility over Shanice’s claim. Shanice is not a participant in that dispute. Until it is resolved, RSA will continue to pay and adjust Shanice’s file.¹²

On July 30, 2015, after mediation failed to resolve the issue of medical benefits under the four treatment plans referred to above, Shanice applied for Arbitration before the Commission. At the Pre-Hearing conference on November 10, 2015, the dispute was not resolved, and the Arbitration was set down for Hearing on November 14, 2016.

On February 9, 2016, Shanice submitted a new treatment and assessment plan in the amount of $14,012.00. The Insurer denied this new medical benefit claim in light of the new LAT¹³ scheme in effect since April 1, 2016.

Relief Sought

The Insurer brought a Motion before me on April 27, 2016, seeking an Order for “dismissal of the Application for Arbitration, or alternatively a permanent stay of the Application for Arbitration pending the outcome of the Superior Court action.”

The Issue

The Insurer states that although section 281(1) of the Insurance Act, R.S.O. 1990, c. I.8 (prior to the amendments of April 1, 2016) allows a person to choose to bring a claim for accident benefits in either a court proceeding or before an Arbitrator, this does not entitle the Applicant to use both fora. The Insurer states that the insured person’s choice is not unfettered, that multiple proceedings should be avoided, and that therefore this Arbitration should not proceed. The Insurer’s position is that, having chosen to amend her claim in the Superior Court of Justice to include a declaration as set out in paragraph 1(d)(e) and (f) of the claim, the Applicant is not entitled to pursue her claim for accident benefits under the Schedule in this Arbitration.

According to the Insurer, the claims in the Arbitration and in the court litigation are substantially similar. The court action in which the Applicant has made claims in the Amended Statement of Claim is “substantially underway”, and the court action is broader in scope than this Arbitration. These factors lead to an unnecessary duplication of proceedings entailing greater costs, delays and the possibility of inconsistent results. The Insurer submits that there is no serious impediment to having the Insured’s claims moved to the court action.

The Applicant submits that the Insurance Act allows her to proceed with this Arbitration despite her court action dealing with the same accident. According to the Applicant, she could choose either court or Arbitration under the Schedule, as the relief requested in the two actions is different. The Applicant further maintains that denying her the right to bring the four disputed claims in this Arbitration would oblige her to bring the four present claims before a judge in court, in proceedings which will take years more to complete. The Applicant maintains that preventing such a delay is an adequate justification for overriding the principle against multiple actions.

Legal Argument

The Insurer’s Motion for dismissal of the Application for Arbitration is founded on the solid and well-accepted principle of avoiding a multiplicity of procedures, which increase the cost and complexity of litigation, and can produce inconsistent results that undermine the credibility of the system. Director’s Delegate Draper in the Mangat¹⁴ decision, commented:

The issue of multiple proceedings has been a vexing problem. Since 1990, insured persons have had the option of having their entitlement to accident benefits, or the amount of those benefits, determined in court or by arbitration. Insurers do not have the same choice. They must go to court. The question is how to reconcile the insured person’s right to choose arbitration with the sensible goal of avoiding multiple hearings.

In the case of Tharmabaskaran,¹⁵ the Director’s Delegate stated that there is no absolute right of forum choice, and an insured person who has already elected to go to court on accident benefits does not have an absolute right to take later cases to Arbitration. The Director’s Delegate did not, however, say that having commenced a civil action, a person is thereby absolutely precluded from proceeding with an Arbitration at the Commission, as well. This leads one to conclude that the analysis and decision whether or not to allow the Arbitration to proceed are in the discretion of the Arbitrator, although that discretion is somewhat limited. To depart from the general principle that multiple actions are to be avoided if possible, a decision allowing a person to proceed in two different fora must be based on convincing reasons.

In the Mangat decision, the Arbitrator had allowed Mr. Mangat to proceed with Arbitration on the basis that it would allow him to have a speedy and inexpensive resolution of his claim. On appeal, the Director’s Delegate found that the Arbitrator’s approach was too narrow, as she had failed to consider overlapping factual questions central to both proceedings. The Director’s Delegate in that case stayed the Arbitration proceedings pending the outcome of the court action.

The Insurer cites the Wasiela case¹⁶ in which the Arbitrator reviewed the case law on concurrent proceedings and enunciated the principles to be considered in determining whether a person is precluded from proceeding before both the Superior Court and the Commission:

(a) Does the Arbitration involve issues substantially similar to those in the civil action?

(b) How far along is the civil action?

(c) Is the civil action broader in scope than the Arbitration, both in terms of the issues involved and the relief sought?

(d) Does the Arbitration unduly duplicate the proceedings leading to greater costs, delays, and raising the specter of inconsistent results?

(e) Is there any serious impediment to having the issues in the Arbitration move to the civil action? [Arbitrator's emphasis throughout]

As these five questions form an ideal structure for the analysis of the circumstances of this Arbitration, I shall deal with them in turn.

(a) Does the Arbitration involve issues substantially similar to those in the civil action?

In Wasiela, Mr. Wasiela’s Statement of Claim included claims for non-earner benefits, attendant care benefits, housekeeping and home maintenance, cost of an examinations, medical and rehabilitation benefits, and a declaration that he had suffered a catastrophic injury. In that case, it would have been difficult indeed to separate the evidence of the Commission and court actions. In Wasiela, Arbitrator Thérèse Reilly found that, because the decision regarding the claim for the cost of an examination could not be entertained unless a finding of catastrophic impairment had already been made, there would necessarily be a duplication of issues and an overlap in the evidence required by both proceedings.

The Insurer submits in the present Arbitration that the issues raised by the Applicant in both proceedings are substantially similar, as it is “difficult to see how one could conduct a Hearing at FSCO regarding entitlement to speech language pathology services, a Macbook Pro, social work services and occupational therapy without also discussing the accident’s impact on the Applicant’s activities that would be raised in the lawsuit.”¹⁷

In the submission of Ms. Clarke-Hunter, the issues are not substantially similar. Her counsel states that the civil action deals only with coverage and priority between RSA and Dominion. It does not address entitlement to specific medical benefits. In contrast, the only issues in dispute in this Application for Arbitration are the medical benefits for the four treatment plans denied by the Insurer.¹⁸

Examining the Applicant’s Amended Statement of Claim, I find that the substantive relief of the amendments claimed is limited to declarations. Ms. Clarke-Hunter in her civil action, is not asking the court to order payment by Western of any specific damages to which she may be entitled, but simply to decide - if she is entitled - which of the multiple defendants must bear the cost of compensating her. In contrast to the Wasiela case, the issues in Ms. Clarke-Hunter’s civil action involve issues between the Insurers, her mother, and the MVACF, but not her entitlement to the specific medical benefits claimed in the Arbitration. While it is true that her claim in negligence will likely involve some of the same medical evidence as that to be adduced in the Arbitration, I find this link insufficient to establish that her claims in the civil action and the Arbitration are “substantially similar.”

(b) How far along is the civil action?

Maintaining two simultaneous parallel actions in different fora is certainly to be avoided if possible, as the Insurer’s counsel has pointed out. The Insurer states that examinations for discovery are set for June 2016, and so are imminent, with the same issues needing to be “flushed out” in both proceedings. The Insurer also pleads that it has expended considerable resources in defending the civil action. With respect, the cost of the decisions made by the Insurer in defending the civil case are not material to this Arbitration, absent a finding that the two actions are covering “substantially similar” issues.

The Applicant’s counsel informs us that the first available date for a long Hearing in the civil case will likely be in 2018.¹⁹ Medical evidence is incomplete at the time of this application, with examinations scheduled for July and September 2016. No pre-trial conference has yet been organised. The civil action is complex. It involves a consent issue between the estate of the owner and the now-deceased driver of the vehicle; contributory negligence on the part of Ms. Clarke-Hunter’s mother (a joint plaintiff in that action); an allegedly underinsured driver, the alleged dependence of the Applicant on her mother and grandmother; and the priority issue between two insurance companies and the MVACF.

This Arbitration on the other hand is scheduled for Hearing less than six months from the date of this Decision, on November 16, 2016. Ms. Clarke-Hunter is currently enrolled in a university course. She has already incurred some of the costs which have been denied. If she is found to be entitled to benefits under the Schedule, then delaying their payment by a year or 18 months forcing her to wait is to frustrate the purpose of the Schedule and the optional Arbitration system at the Commission, which is designed for the economical and speedy resolution of these disputes. This is a case where the adage “Justice delayed is justice denied” is particularly appropriate.

(c) Is the civil action broader in scope than the Arbitration, both in terms of the issues involved and the relief sought?

Both parties agree that the civil action is broader in scope than the Arbitration. However, the civil action, broad as it is, does not include the relief being sought in the Arbitration, which is limited to the four denied claims already mentioned. It does involve five defendants and the Applicant’s mother and a complex point of law regarding the priority dispute between RSA and Dominion. The substantive claims in this Arbitration are different from those of the civil action. Resolution of all the issues in the civil action is not a prerequisite to making a decision regarding Ms. Clarke-Hunter’s entitlement to specific benefits as claimed.

(d) Does the Arbitration unduly duplicate the proceedings leading to greater costs, delays, and raising the specter of inconsistent results?

For the reasons mentioned in the preceding paragraph, the answer to this question is that the Arbitration does not unduly duplicate the proceedings. Such duplication as may occur is justifiable in light of the circumstances of this case. The Insurer states that the Applicant cannot be allowed to re-elect her choice of forum repeatedly. The Applicant states that choosing one forum for Schedule benefits entitlement, when the civil action involves many other issues, and declarations of priority, does not constitute “repeated re-election”.

In the present circumstances, I find that bringing claims for different relief in two different fora does not constitute repeated re-election.

(e) Is there any serious impediment to having the issues in the Arbitration move to the civil action?

The Insurer argues that there is no impediment at all to having the issues in the Arbitration move to the civil action. Counsel for the Applicant on the other hand, cites the prejudice that will occur by delaying the resolution of her claim for a further 18 months. While it is true that no claims were pursued for fifteen years after the accident, that alone is not a reason to deny a bona fide claim as the circumstances change. While the evidence is not yet before any tribunal, it is likely that at the age of three, Ms. Clarke-Hunter had no need for a Macbook or for the other goods and services recommended or provided under the treatment plans currently in dispute. Today, as an adult, her needs are different. By having the Arbitration Hearing as scheduled in November 2016, these four benefit claims can be assessed and decided, irrespective of the multiple side-issues raised in the civil litigation. The fact that the issues in the Arbitration can be transferred to the civil action does not mean that they should be transferred. This question is but one consideration in the list of five; the competing interests in play must be evaluated accordingly.

Conclusion

On balance, I find that the circumstances in this case do not warrant the dismissal of this Application for Arbitration, nor is a stay appropriate. In fact, it may very well be that the evidence adduced in this Arbitration and the resulting Decision will be useful in either settling the civil action or in clarifying some of the issues, thereby simplifying and shortening those proceedings.

EXPENSES:

The question of expenses of this Motion is deferred to the Hearing Arbitrator.

July 18, 2016

Louise Barrington Arbitrator

Date