Karthigesu v. Wawanesa Mutual Insurance Company, 2016 ONFSCDRS 269

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 269

FSCO A13-006227

BETWEEN:

KANTHASAMY KARTHIGESU

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Anita Idemudia

Heard: July 8, 2016, by telephone conference

Appearances: Charles Stitz for Mr. Karthigesu

Katherine E. Kolnhofer for Wawanesa Mutual Insurance Company

Background:

The Applicant, Kanthasamy Karthigesu, was involved in a motor vehicle accident on September 11, 2010. Dispute arose between Mr. Karthigesu and Wawanesa Mutual Insurance Company (“Wawanesa”) concerning his entitlement to accident benefits payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Karthigesu’s counsel applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act,² as amended, in May 2013. Unfortunately, Mr. Karthigesu passed away in April 2014, shortly after mediation and before the Application for Arbitration was filed.

A pre-hearing discussion in this matter was initially scheduled to take place on May 13, 2014 and subsequently adjourned to June 9, 2014, to enable Mr. Karthigesu’s family apply for the appointment of an estate trustee. Several adjournments followed thereafter (on July 24, 2015, January 29, 2016 and April 29, 2016) in the interest of fairness, to give Mr. Karthigesu’s family the opportunity to apply for the appointment of a trustee in order to pursue the accident benefits claim and instruct counsel.

Result:

Mr. Karthigesu’s claims, as set out in his Application for Arbitration, are dismissed.
There is no order as to expenses.

Evidence and Analysis

I note that at the April 29, 2016 pre-hearing resumption, Arbitrator Mervin suggested that the Public Guardian and Trustee (“PGT”) be appointed to act with respect to this matter, but Mr. Karthigesu’s counsel advised that the PGT would not intervene when there is a living heir and that despite his best efforts to encourage Mr. Karthigesu’s son or widow to take the necessary steps to apply for the appointment of a trustee, nothing had been done.

At the April 29, 2016 pre-hearing meeting, Wawanesa requested that the Application for Arbitration be dismissed pursuant to Rule 68.1 of the Dispute Resolution Practice Code, which allows for dismissal by an adjudicator without a hearing where the proceeding is frivolous, vexatious or commenced in bad faith. Arbitrator Mervin in his letter of the same date also made reference to Rule 68.2 which provides that before dismissing a proceeding under this rule, the Registrar or an Adjudicator shall deliver written notice to all parties of the intention to dismiss the proceeding on the grounds set out in Rule 68.1, and invited counsel to make submissions as to whether the arbitration should be dismissed without a hearing at the resumption of the pre‑hearing scheduled for July 8, 2016. The letter included notice of the arbitrator’s intention to dismiss the arbitration application under the grounds set out in Rule 68.1. Parties were advised to file and serve any objection in writing, within 20 days of receiving the said notice. No objections were filed.

The pre-hearing was resumed on July 8, 2016, and Wawanesa made further submissions in support of the dismissal of the application on the basis that the claim has become vexatious, as it has been more than two years since Mr. Karthigesu passed away and no trustee has been appointed to date. Mr. Karthigesu’s counsel advised that while best efforts have been made encourage the family to apply for the appointment of a trustee, the family has failed to take steps to do so.

It has been more than two years since Mr. Karthigesu passed away and no person has been appointed to pursue the claim for accident benefits. I find that the family’s failure to take the necessary steps to advance Mr. Karthigesu’s claim has had an onerous effect on Wawanesa, as they have had to incur costs in defending the claim since Mr. Karthigesu’s passing in 2014. Given the amount of time and opportunity afforded the family (by Arbitrator Mervin) to properly advance the claim, it is logical to conclude that the claim has become vexatious in the sense that there is no legally viable way of pursuing it.

I note that Mr. Karthigesu’s counsel expressed concerns over dismissing the claim as in his opinion, doing so “will effectively deny the deceased/the executor, access to justice”. I am satisfied that reasonable opportunity was given to the deceased’s family to pursue this matter, given the numerous adjournments granted in the proceedings. I am also satisfied that counsel has been diligent in discharging his lawyer/client obligations.

Given the circumstances of this case, I find it appropriate to dismiss the proceeding against Wawanesa, pursuant to Rule 68 of the Dispute Resolution Practice Code.

Wawanesa did not make an expense request.

October 12, 2016

Anita Idemudia

Arbitrator

Date