Neutral Citation: 2016 ONFSCDRS 220 FSCO A15-000363

BETWEEN:

SONIA POLLARD Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Marcel D. Mongeon

Heard: In person at ADR Chambers on June 14, 2016 and by written submissions completed on June 15, 2016

Appearances: Ms. Sonia Pollard did not participate Ms. Alisa Mazo and Mr. Anton Serikov participated for Ms. Sonia Pollard Mr. Darrell March participated for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ms. Sonia Pollard, was injured in a motor vehicle accident on November 12, 2013, and sought accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Pollard, through her representatives, applied for arbitration at the Financial Services Commission of Ontario ("FSCO") under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Hearing are:

Should the Applicant's Application for Arbitration be dismissed?
Is State Farm entitled to its expenses in preparing for and attending the Arbitration proceedings from Ms. Pollard and, if so, in what amount?

Result:

The Application for Arbitration is dismissed.
State Farm is entitled to its expenses in preparing for and attending the Arbitration proceedings from Ms. Pollard in the amount of $8,033.71, which amount comprises costs of $6,529.87, HST of $848.88, and disbursements of $654.96.

EVIDENCE AND ANALYSIS:

Procedural Background

By the Pre-Hearing Letter issued on July 16, 2015, this Arbitration was scheduled to be conducted over three days: June 14 to 16, 2016.

The following issues in the Arbitration were identified in the Pre-Hearing Letter:

Is the Applicant entitled to receive a weekly income replacement?
What is the amount of the weekly income replacement benefit that the Applicant is entitled to receive?
Is the Applicant entitled to receive three specified medical benefits totaling $3,579.36?
Does the Application for Arbitration constitute an abuse of process, frivolous or vexatious proceeding as claimed by the Insurer?
Is there an obligation on the part of either of the parties to pay expenses to the other in respect of the Arbitration?
Is the Applicant entitled to the payment of interest on the payment of any overdue benefits?

At the commencement of the Hearing at 10:00 a.m. on June 14, the Insurer's representative made three Motions, described below. During the argument on those Motions, the Applicant's representative withdrew the issues related to the weekly income replacement (Issues 1 and 2 above).

Preliminary Motions

The Insurer's three Motions are:

The Applicant was not personally in attendance. Therefore, her Application for Arbitration should be dismissed;
The Applicant's Arbitration Brief was allegedly served in less time than what is required by the Dispute Resolution Practice Code ("DRPC"). Therefore, the brief should be excluded from being admitted into evidence; and
Specific production orders made at page 3 of the Pre-Hearing Letter had not been complied with. Therefore, the Application for Arbitration should be dismissed.

The Applicant added a new issue as a fourth Motion:

Should the determination that the Applicant's injuries were not subject to the Minor Injury Guideline under the Schedule be added as an issue to the Arbitration?

The argument on the Motions was conducted between 10:00 a.m. and approximately 11:30 a.m. and I adjourned proceedings until my decision on the Motions, which I gave orally, at approximately 3:00 p.m.

Facts on the Motions

In determining the Motions, I made the following findings of fact:

The Applicant was absent when the Hearing commenced. No letter or Affidavit from the Applicant was presented to explain the circumstances of her absence.

The Applicant's representatives had full authorization to discuss all issues in dispute. The representatives are licensees of the Law Society of Upper Canada.

The Applicant's representatives sent a letter forwarding an Arbitration Brief Index by fax to FSCO. The letter, bearing a date of May 16, 2016, was received by FSCO as evidenced by the footer added by FSCO's fax machine at 4:33:21 PM on 5/16/2016. The header added by the representative's fax machine states the obviously incorrect information of "01/05/2012 01:20".

The Applicant's representatives sent an Applicant's Arbitration Brief Index to the Insurer's representative on Monday May 16, 2016. The actual Arbitration Brief was received by the Insurer's representative on Tuesday, May 17, 2016. A similar brief was received by ADR Chambers and its receipt was date-stamped on May 17, 2016.

The Insurer's representative advised the Applicant of its intention to raise the second Motion (the exclusion from evidence of the Applicant's Brief) on May 18, 2016.

The Insurer's representative received correspondence from the Applicant's representatives on May 20, 2016 containing the Applicant's list of witnesses for this Hearing. A Supplementary Arbitration Brief was also received on the same date from the Applicant's representatives.

No evidence was provided that the Applicant had complied with the specific document production orders contained in the Pre-Hearing Letter at page 3.

Decisions on the Preliminary Motions

Lack of Personal Attendance

In support of the Motion that I ought to dismiss the Application for Arbitration due to the Applicant's lack of attendance, the Insurer cited the arbitral award of Mohamed and State Farm Mutual Automobile Insurance Company.² Although it is correct that in that case the absence of the Applicant in person was a factor in coming to the conclusion that the Application for Arbitration should be dismissed, a stronger factor was that the Applicant's representative was also seeking removal from the record.

That is not the case here. The Applicant's representatives were and are ready to conduct a Hearing and had and have full authority to do so. Rule 9 of the DRPC applies. There is nothing in Rule 9 or any other part of the DRPC which sanctions a represented Applicant for not attending the Hearing. In passing, my personal experience is that many Applicants do not attend every aspect of the Hearings that they are involved in. As long as they have a properly authorized their representative under Rule 9, in normal circumstances, there is no requirement that Applicants attend their Hearing.

I denied the first Motion on this reasoning.

Failure to comply with Production Orders in the Pre-Hearing Letter

The next Motion that I dealt with was the third Motion. This was the request to dismiss the Application for Arbitration on the basis that the production orders made at page 3 of the Pre-Hearing Letter had not been complied with.

Rule 34.1 of the DRPC gives me clear direction. It tells me exactly what I can do if a party does not comply with a document production order. The sanctions include that I may:

(a) order a party to pay expenses (including interim expenses), or deny expenses to a party; (b) exclude a document filed; (c) impose a new timetable for compliance; (d) draw an adverse inference against a party; and (e) make such other order as the arbitrator considers just.

Using the standard statutory interpretation rule of reading general provisions (such as (e)) in the same nature as the more specific rules (as found in (a) through (d)), I find that the remedy sought by the Insurer of the dismissal of the Application for Arbitration is not warranted. The Applicant cannot see its entire Application dismissed just because it has not complied with a document production order. The remedy of a dismissal sought by the Insurer is not authorized by Rule 34.1 of the DRPC and I denied this Motion.

Request by Applicant to add the issue of the Minor Injury Guideline

I allowed the Applicant's Motion to add an issue in this Arbitration.

The Applicant's representatives had requested that I consider whether or not the Applicant's injuries had been correctly characterized as subject to the Minor Injury Guideline as an issue in this Arbitration.

Common sense dictates that in order for me to be able to consider the medical benefits sought by the Applicant which exceed the Minor Injury Guideline limit of $3,500.00, I also need to make a determination as to whether the Guideline is applicable or not. There should be no prejudice to the parties to have me consider this issue in addition to those which were listed in the Pre-Hearing Letter.

Motion to Exclude Applicant's Arbitration Brief and Witnesses

The most significant Motion made by the Insurer was to exclude the Applicant's documents and her witnesses. The basis for such exclusion was the late filing of the documents and witness list.

Section 39.1 of the DRPC is clear:

Subject to Rule 39.2, all documents, reports (including experts' reports) and assessments to be introduced at a hearing by either party must be served on the other party at least 30 days before the first day of the hearing.

Rule 39.2 is inapplicable in this case as no special order was sought prior to the Hearing.

The Pre-Hearing Letter also contained similar language as to the requirement to exchange documents and advise of witnesses.

In this case, the actual documents were not received by the Insurer until Tuesday, May 17, 2016.

When is thirty days before June 14, 2016 (the first day of the hearing)?

Rule 8.1(a) of the DRPC tells us that "where there is a reference to a number of days between two events, they will be counted by excluding the day on which the first event happens and including the day on which the second event happens." Therefore, starting on the Hearing date (i.e. June 14, which being the first event is excluded) and then count back 30 days. June 13 is, therefore, day 1, June 12, day 2; ...; May 17, day 28; May 16, day 29; May 15, day 30.

Since May 15 was a Sunday, the DRPC, Rule 8.1(b) provides: "where the time for doing an act under these Rules ends on a Saturday, Sunday, or a statutory holiday, the act may be done on the next day that is not a Saturday, Sunday, or a statutory holiday". However, we are left with some confusion. Is the 'next day' referred to in Rule 8.1(b) the normal passage of time (forwards) or in the same direction that we were just counting (backwards)?

The difference is the source of the Applicant's opposition to the Motion. The Applicant's representatives say: since the 30th day would be on Sunday May 15, then we can still serve on the "next day": Monday May 16. The Insurer's representative argues that since we were counting backwards, the "next day" after the Sunday should be Friday (May 13).

On the facts, I do not need to decide this issue.

Only a document index was served on Monday May 16 by the Applicant. The documents were only served on May 17 when the Insurer's representative and ADR Chambers actually received them.

Even by the Applicant's own counting – which had Monday May 16, as the date that the documents could be served – the documents were served a day late on Tuesday May 17. By the Insurer's counting (requiring service on Friday, May 13), they were served four days late. My finding is simple: the documents were served outside the time requirement of Rule 39.1 of the DRPC, by either method of counting.

The Applicant's representative argued that the index was as good as the original documents. After all, the Insurer should be able to figure out what the documents were. However, the DRPC is specific. It does not refer to indices or lists—it refers to the documents that will be introduced at a Hearing. It is clear that service of an index cannot make up for service of the documents themselves.

Documents other than the Applicant's Arbitration Brief and the Applicant's Witness List were served even later than May 17. The facts establish service of lists and documents at dates later than May 17.

The sanction for late filed documents is provided in Rule 39.2 of the DRPC:

The hearing arbitrator ... will not admit evidence at a hearing that ... was not served on the opposing party in accordance with Rules 39.1 and 39.2, unless the hearing arbitrator is satisfied that extraordinary circumstances exist to justify an exception. (My emphasis)

No evidence was presented about extraordinary circumstances that might justify an exception. Therefore, I am directed to exclude evidence that has been late filed. This includes all of the documents of the Applicant.

In the case of the Applicant's witnesses, their identification to the Insurer is required by Rule 41.1 of the DRPC. Rule 42.3 relating to expert witnesses makes it clear that I may exclude a witness from a Hearing if there has been a default in complying with the Rules. Rather than excluding any expert witnesses, I chose to defer such a consideration until the Applicant would actually tender such witnesses. I noted that with the exclusion of the reports, it would likely be difficult for the Applicant to tender any expert witnesses.

Based on the foregoing analysis, I ordered that the Applicant could not enter any documents into evidence in this matter. I deferred the exclusion of specific witnesses until such witnesses would be tendered by the Applicant.

Neither party directed my attention to Rule 81. Rule 81 might allow me to set aside any time limit – including the Rules respecting the service of documents – on terms that I might consider just. Given that no party argued this to me, and the specific Rules address the documents and witness lists, I did not consider the Rule.

Hearing on the Merits

After providing the parties with my decisions on the four Motions, at about 3:30 p.m., I proceeded with the Hearing. I invited the Applicant's representatives to call their first witness. The representatives indicated that their first witness was to be the Applicant and she was not available. They requested an adjournment. The adjournment was vigorously opposed by the Insurer.

I decided that an adjournment should not be granted. I was guided by Practice Note 9 to the DRPC. After canvassing the requirements of that document and Rule 72 of the DRPC, I noted that:

no evidence had been presented as to the reason for the absence of the Applicant;
no request for adjournment had been made in writing;
other than the Applicant, my previous rulings meant that there was not likely to be any relevant evidence presented on the Applicant's behalf; and
the Insurer was prepared to proceed immediately.

Based on the foregoing, I determined that an adjournment was not warranted and did not grant the Applicant's request.

As further support for my decision not to grant the adjournment, I note that after the Applicant withdrew the issue of the income replacement benefit, there were less than $4,000.00 of medical benefits in dispute in this claim. If I had granted the adjournment and extended the Hearing another day, the Hearing would be out of proportion to the amount in dispute.

The Applicant's representatives had no other evidence to present. On this basis, the Insurer made an application to dismiss the Application for Arbitration with an additional request that I fix expenses in the Insurer's favour.

The Applicant did not present any evidence when called to do so. Because the Applicant had the burden of proof in establishing her entitlement to the benefits sought, the failure to file evidence leads to the inescapable conclusion that the Applicant did not prove her claim, and therefore, the Application for Arbitration should be dismissed.

EXPENSES:

The Insurer has submitted a Bill of Costs claiming legal fees calculated at the rate that is authorized under Schedule 2 to O. Reg. 107/99 under the Legal Aid Services Act, 1998 of $6,529.87, HST of $848.88 and disbursements of $654.96, for a total of $8,033.71. A review of the documents submitted shows 42.1 hours of work for Darrell P. March (called to the bar in 1990) at $136.43 per hour and 25.5 hours of work of three law clerks at $30.83 per hour.

The Hearing was expected to last three days and collapsed on the first day as described above when the Applicant failed to present any evidence.

Rule 75.2 of the DRPC and the Expense Regulation found in Section F of the DRPC have the criteria to be considered. I have considered the relevant criteria as follows.

Criterion 1: Each party's degree of success: The failure of the Applicant to produce any evidence led to the Insurer's prevailing in this Arbitration. Even prior to the failure, at the outset of the Hearing, the Applicant had withdrawn a significant part of her claim in the income replacement benefit. All that was at stake for the Applicant was a claim for a little more than $3,500.00. The Applicant failed to prove this claim.

Criterion 2: Written offer to settle: No such offers were brought to my attention.

Criterion 3: Novelty of issues raised: No such issues were raised in this proceeding.

Criterion 4: Conduct of a party or their representative that tended to prolong or obstruct the proceeding: Although the income replacement benefit issue had been withdrawn at the outset of the Hearing, no doubt the Applicant's representatives were in a position at an earlier time to understand that this issue was going to be withdrawn. By not doing so until the outset of the Hearing, they caused the Insurer to prepare for a more difficult Hearing and, therefore, could be considered to have obstructed the proceeding.

Criterion 5: Was any aspect of the proceeding improper, vexatious or unnecessary: Although, under the previous criterion, I have found that the conduct of the Applicant's representatives did obstruct the proceeding, this does not, in turn, imply that their actions were improper, vexatious or unnecessary. I find that there was no such aspect in this case.

Based on the foregoing criteria, I find that it is reasonable that all of the Insurer's costs should be allowed at $8,033.71 with an additional amount of HST of $848.88.

The Bill of Costs shows the following disbursements: Copies ($77.40); Delivery/Courier ($22.68); Conduct Money for witnesses that had been summonsed ($204.88); and Clinical notes ($350.00). All of these disbursements are reasonable and provided for in the Expenses Regulation. The total of $654.96 is also allowed for disbursements.

August 18, 2016

Marcel D. Mongeon Arbitrator

Date

Financial Services Commission of Ontario