Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 74

Appeal P15-00025

OFFICE OF THE DIRECTOR OF ARBITRATIONS

YOHANNES BERHE

Appellant

and

NORTHBRIDGE GENERAL INSURANCE CORPORATION

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

The Appellant, Mr. Yohannes Berhe, was self-represented

Ms. Linda M. Kiley for the Respondent, Northbridge General Insurance Corporation

HEARING DATE:

By written submissions due February 19, 2016

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Pursuant to Rule 51.2(b) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014), this appeal is rejected because it does not raise a question of law.

2. The Appellant, Mr. Yohannes Berhe, shall pay the Respondent, Northbridge General Insurance Corporation, its legal expenses of this appeal assessed in the amount of $1,250, inclusive of all fees, disbursements and taxes.

March 4, 2016

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

The Appellant, Mr. Yohannes Berhe, was injured in a motor vehicle accident on June 30, 2007. As a result, he applied to his first-party automobile insurer, the Respondent, Northbridge General Insurance Corporation, for statutory accident benefits under the 1996 Schedule.¹

The parties disputed the Appellant’s entitlement to income replacement (“IRB”), attendant care, housekeeping and medical benefits. On October 7, 2010, the Appellant filed for compulsory mediation at the Commission. The mediator reported to the parties on April 5, 2011. The Appellant applied on August 2, 2011 for arbitration at the Commission.

The Respondent brought a motion before Arbitrator Rogers (the “Arbitrator”), heard November 12, 2014, for an order precluding the Appellant from proceeding to arbitration because his applications for mediation and arbitration were filed beyond the two-year limitation period in subsection 281.1(1) of the Insurance Act, R.S.O. 1990, c. I.8 and subsection 51(1) of the 1996 Schedule.

The Arbitrator’s February 27, 2015 decision on a preliminary issue dismissed the Appellant’s application for arbitration on the basis that the Appellant was precluded from proceeding to arbitration. The Arbitrator found:

1. The Respondent gave a clear and unequivocal refusal to pay IRBs and attendant care and housekeeping benefits by an OCF-9 (Explanation of Benefits) dated May 6, 2008. The Appellant did not apply for mediation until October 7, 2010, some two years and five months later. The Arbitrator rejected the Appellant’s claim he had filed an earlier Application for Mediation, as the Appellant provided no record of same.

2. The Appellant submitted a treatment plan for $3,020 regarding Bloor-Dufferin Rehabilitation Centre. The Respondent clearly and unequivocally denied this claim by OCF-9 dated January 2, 2008. The Appellant also submitted a treatment plan for $2,997.32 for the services of Bay & College Physiotherapy and Rehab. The Respondent gave a clear and unequivocal denial of this plan by OCF-9 dated June 13, 2008.

The Appellant filed a Notice of Appeal dated March 23, 2015. He states “I did not receive the IRB refusal on November 12, 2008.” He submits that he had requested an extension to apply for arbitration as he was in custody, that the Arbitrator failed to consider his requested extension and that there be a new hearing. The Appellant’s March 22, 2015 letter requested an extension to pay the $250 filing fee for his appeal due to logistical difficulties arising from a current incarceration.

My April 1, 2015 letter noted the Appellant had provided neither the $250 filing fee nor a Statement of Service on the Respondent (both required by Rule 51.4). I put on hold acknowledging the appeal. I set out a summary of the appeal process, referenced the applicable Rules, advised where those Rules were to be found online and noted the Commission web site advice on how to find a lawyer.

The Commission received the Appellant’s $250 filing fee on April 28, 2015.

The May 11, 2015 Response to Appeal argued the Notice of Appeal should be dismissed under Rule 51.2(b) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”) as it did not raise a question of law and Rule 51.2(d) because it lacked sufficient detail to allow a response. The Respondent argued, in the alternative, that the Notice of Appeal should be dismissed under Rule 68 on the basis it was frivolous and vexatious.

The Respondent submitted that the Appellant was essentially restating his arguments at arbitration and/or was seeking to introduce new evidence. It argued that fresh evidence should not be admitted, as with due diligence this evidence could have been adduced at arbitration. It further argued that it is well established that the role of an appellate officer is not to rehear the matter or substitute his or her assessment of the evidence.

My May 13, 2015 letter stated that given the Appellant was self-represented and that fresh evidence may be sought to be introduced, I found it premature to reject the Notice of Appeal under Rule 51.2(b) on the basis that it failed to raise a question of law. I set out the case law criteria for allowing fresh evidence on appeal. I also set out the case law holding that errors of law included findings of fact made in the complete absence of evidence. I detailed how these cases could be found online.

Applying my discretion under Rule 81 of the Code, my May 13, 2015 letter extended the 30-day time line for the Appellant’s written submissions under Rule 54.1 to July 3, 2015. I noted Rule 56.5 of the Code that an appeal may be decided in any manner considered appropriate. If either party was of the view that oral argument, in addition to written submissions, was reasonably required, the party was to advise, with reasons. My June 11, 2015 letter, noting the Appellant’s change of address having been released from custody, reminded the Appellant of his July 3, 2015 deadline for written submissions.

The Appellant’s letter dated June 23, 2015, received July 6, 2015, advised he had been in custody since May 10, 2015. The Appellant requested an extension to September 2015 as well as a copy of his arbitration and appeal files. My July 9, 2015 letter extended to September 30, 2015 for the Appellant to deliver his written argument. I enclosed for the Appellant the appeal documents in the file. I noted the Appellant had previously requested his file from the arbitration unit five different times, each request having being met by the Commission. I asked that the Appellant advise which documents he had so as not to duplicate material.

My October 13, 2015 letter confirmed the Appellant had not provided his written submissions due September 30, 2015, nor advised which arbitration documents he had. It was now five months since my May 13, 2015 letter. While the Appellant had been given allowances for the challenges he faced, there had been an unexplained silence from him approaching three months.

I noted that subsection 283(1) of the Insurance Act restricts appeals to questions of law. While this Notice of Appeal raised questions of fact, I did not presently see that it raised a question of law. I gave the Appellant until November 20, 2015 to deliver his written argument as to why his Notice of Appeal should not be rejected for the reasons raised by the Respondent:

1. It did not raise a question of law, as required by Rule 51.2(b) of the Code.

2. It lacked sufficient detail to allow a response, under Rule. 51.2(d) of the Code.

3. It was frivolous and vexatious under Rule 68 of the Code.

My November 18, 2015 letter noted the Appellant’s advice he was now out of jail. I extended, peremptory, to December 18, 2015 his deadline for his written arguments as to why his Notice of Appeal should not be rejected. I explained that peremptory meant barring extraordinary circumstances should he not provide his written argument by December 18, 2015, I would proceed on the basis of the Notice of Appeal, the Response to Appeal and the Respondent’s cost submissions due January 15, 2016 to determine whether to reject his Notice of Appeal and, if so, on what terms. I enclosed for the Appellant further copies of the relevant appeal documentation.

My December 21, 2015 letter responded to the Appellant’s letter received December 18, 2015 but dated December 8, 2015. The Appellant advised he had been arrested December 5, 2015 for criminal harassment. He sought a further extension of 60 to 90 days. He advised he was now looking for a lawyer. The Appellant set out certain alleged facts, including that he did not receive a letter in July 2008 from the Respondent.

I noted that the decision from which the Appellant was appealing was issued February 27, 2015. The Appellant had almost ten months to find a lawyer for this appeal. I confirmed the Respondent had until January 15, 2016 to deliver its arguments as to the legal expenses it was seeking in this appeal and to respond to the Appellant’s request for a time extension.

My January 13, 2016 letter noted receipt on January 12, 2016 of a letter from the Appellant dated December 10, 2015. The Appellant stated that the Respondent did not respond to his IRB claim for almost two years. He alleged he had never received a refusal letter. The Appellant requested a 60 to 90 day extension.

The Respondent’s January 13, 2016 twenty-page submission and cost outlines set out a history of delay and lack of co-operation by the Appellant throughout the Commission process. It submitted the Appellant consistently stated he had never been provided with a copy of his accident benefits file, although that had been provided to him on nine occasions.

The Respondent noted the Appellant’s late filing of his Notice of Appeal and filing fee, his failure to serve documents on the Respondent and his repeated requests for extensions. It stated that throughout both arbitration and appeal the Appellant claimed he intended to retain counsel and had been given numerous extensions to do so.

The Respondent submitted that while the Appellant claimed the Arbitrator had failed to consider evidence, he failed to delineate how this alleged failure raised a question of law. It further argued that there was no evidence that this appeal, or the arbitration itself, were initiated in good faith. The Respondent stated that the Appellant’s “constant plea for extensions have resulted in excessive undue delays and should not be granted in perpetuity.” The Respondent opposed any further extension being given to the Appellant.

The Respondent submitted that as the Notice of Appeal failed to raise an issue of law, it lacked sufficient detail to allow a response and was not brought in good faith. Rather, the appeal was frivolous and vexatious and an abuse of process.

The Respondent sought an arbitration expense award of $13,993.43 and $4,612.12 for the appeal. It stated that while it was unlikely the Appellant would pay any ordered expenses, this penalty was important as a cautionary note to those who initiate proceedings that are frivolous, vexatious and an abuse of process and who create extensive delays.

My January 15, 2016 letter, acknowledging the Respondent’s January 13, 2016 documents, noted that the Arbitrator’s February 27, 2015 decision reserved on arbitration expenses, to be determined as set out in Rule 79 of the Code.

I cited Director Sachs’ decision in Menard and Royal Insurance, (OIC P-001055, October 22, 1992) that an appeal affecting an arbitrator’s control of the process must be seen as a rare request for an exercise of appellate discretion requiring special circumstances. I also noted my November 18, 2015 letter that the Respondent should include its submissions on legal expenses “regarding this appeal.” I declined to usurp the Arbitrator’s powers to determine entitlement to orthe quantum of arbitration legal expenses.

Given the volume of the Respondent’s submissions, I extended to February 19, 2016 for the Appellant to provide his response.

The only communication received from the Appellant subsequent to my January 15, 2016 letter was his letter dated January 4, 2016, received January 20, 2016, again not copied to the Respondent. I sent the Respondent a copy of that letter on January 20, 2016. The Appellant again requested a 60 to 90 day extension.

II. ANALYSIS

Rule 50.1 of the Code provides that a “party to an arbitration may appeal an order of an arbitrator to the Director only on a question of law.” Rule 51.2(b) provides that an appeal may be rejected if “it does not raise a question of law.”

Under Rule 54.1 of the Code, the Appellant had thirty days from the May 20, 2015 Response to Notice of Appeal due date to deliver his written submissions. The Appellant has now had more than nine months to put forward his case for appeal. He has been given numerous extensions. The November 18, 2015 extension was peremptory. I am persuaded that any additional extension given to the Appellant will be followed by a further extension request whether he is in or out of jail at that time. I agree with the Respondent that this matter cannot go on in perpetuity. I decline to exercise my discretion to give the Appellant any further extensions.

The Appellant has submitted that he requested an extension to apply for arbitration as he was in custody and the Arbitrator failed to consider this. Section 129 of the Insurance Act states:

Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.

The Commission has ruled, as in Girao and Allstate Insurance Company of Canada (FSCO A07-000288, January 14, 2011), that relief from forfeiture is an equitable remedy reserved to the courts. An arbitrator or appellate officer does not have the jurisdiction to grant such a remedy.

I am persuaded that the Notice of Appeal and the Appellant’s subsequent correspondence do not raise a question of law. Rather, the Appellant disputes the Arbitrator’s rejection of his allegations that the Respondent did not deny benefits and that he applied for mediation and arbitration at earlier points in time. I agree with the Respondent that it is well established that the role of an appellate officer is not to rehear the matter or substitute his or her assessment of the evidence.

Pursuant to Rule 51.2(b) of the Code, I am rejecting this appeal on the basis that it does not raise a question of law.

Applying the criteria in Rule 75.2 of the Code, I find that the Respondent is entitled to its reasonable legal expenses of this appeal. The Respondent was completely successful in the outcome of this proceeding (criterion “a” of Rule 75.2). The Appellant’s conduct, as set out above, prolonged this proceeding (criterion “b”).

The Appellant claims $4,612.12 in appeal legal expenses. My January 15, 2016 letter noted that the Respondent’s Appeals Costs Outline included $1,039.44 for an estimated eight hours for counsel’s appearance. Under Rule 56.5 of the Code, I have rejected this appeal on the record. I have not required the parties to appear, nor have they appeared in person. I am not allowing this claim.

The Respondent seeks $500 for its insurer appeals assessment charge. The Schedule to R.R.O. 1990, Reg. 664 made under the Insurance Act, provides for reimbursement of the filing fee at arbitration and on appeal. It does not include reimbursement of the insurer’s assessment.

Puran and Primmum Insurance Company (Formerly Canada Life Casualty), (FSCO A03-001708, April 30, 2004), amongst other cases, stated that “section 282(11.2) of the Insurance Act, which allowed an arbitrator to order the return of the assessment fee on a finding that the insured commenced an application that was frivolous, vexatious or an abuse of process, was repealed on October 1, 2003.” I have no authority to order payment of the $500 assessment.

The Respondent’s claim for disbursements (other than the assessment fee) is $1 for photocopying. It also seeks 20 hours, at $129.93 an hour, for a total of $2,598.60 for research, correspondence, preparation of submissions and responding to the Appellant’s request for extensions.

I find the hourly rate reasonable. I do not find the hours claimed reasonable.

Henri and Allstate Insurance Company of Canada, (OIC A- 007954, August 8, 1997), held that a line-by-line assessment of the expenses claimed was not appropriate. Rather, a global assessment of reasonable expenses should be made. In Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010) I noted an average appeal expense award to successful insurers of $2,812.91, there being a higher hourly maximum allowed under Rule 78 of the Code to representatives of insured persons.

This matter did not proceed to an oral hearing. In significant measure, the Respondent in this appeal was simply reading the Appellant’s letters and my responses. Much of the Respondent’s January 13, 2016 submissions dealt with arbitration legal expenses that were not an issue before me.

I find the Respondent entitled to its legal costs of this appeal assessed in the amount of $1,250, inclusive of all fees, disbursements and taxes, as being reasonable in this appeal.

March 4, 2016

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.