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

Neutral Citation: 2017 ONFSCDRS 187

FSCO A14-007930

BETWEEN:

ASTER BELAYNEH

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

Before: Caroline King

Heard: March 27, 2017, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Vincent Sinclair for Ms. Belayneh Mr. Alexander Hartwig for Royal & SunAlliance Insurance Company of Canada

Issues:

The Applicant, Aster Belayneh, was injured in a motor vehicle accident on November 2, 2005. She applied for and received statutory accident benefits from Royal & SunAlliance Insurance Company of Canada (“Royal”), payable under the Schedule.¹ A dispute arose about the benefits payable. The parties were unable to resolve their disputes through mediation, and Ms. Belayneh 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 hearing are:

May Mr. Vincent Sinclair represent the Applicant in these proceedings?
Is Ms. Belayneh entitled to receive income benefits as claimed?
Is Royal & SunAlliance Insurance Company of Canada entitled to its expenses?

Result:

Mr. Vincent Sinclair may not represent the Applicant in these proceedings.
The Application is dismissed, and therefore, Ms. Belayneh is not entitled to receive income benefits as claimed.
Royal & SunAlliance Insurance Company of Canada is entitled to its expenses.

EVIDENCE AND ANALYSIS:

The procedural history of this case is unusual. This decision begins with a summary of the procedural history as it will help set the context for consideration of: i) whether Mr. Sinclair may represent the Applicant; ii) how the application should be resolved; and iii) whether the Insurer is entitled to its expenses and whether the Applicant or Mr. Sinclair should pay these expenses.

This application is related to an accident which is stated to have occurred on November 2, 2005. The application for arbitration was filed on October 3, 2014. The Applicant has not participated in this arbitration proceeding since the application was filed despite numerous efforts by FSCO to contact her so that she could participate. In July 2015, Mr. Sinclair advised the FSCO Case Administrator that the Applicant moved to Ethiopia. It is not known when, or if, the Applicant will return to Canada. It is not known where the Applicant lives in Ethiopia (not even the city or area in which she resides), and FSCO does not have any functioning phone number for the Applicant. FSCO has been sending out its notices and communication to the Applicant at her last known address contained in FSCO’s records in accordance with the Dispute Resolution Practice Code’s (the “Code”) Rule 9.1(c). The Applicant has not contacted FSCO regarding her claim for benefits since October 2014.

May Mr. Sinclair represent the Applicant in these proceedings?

For the reasons provided, Mr. Sinclair is excluded from representing the Applicant in the proceedings.

Royal’s Motion.

Royal brought a motion to remove Mr. Sinclair as the Applicant’s representative as he is not licensed by the Law Society of Upper Canada to provide legal services. On page 5 of her letter decision dated December 1, 2016, Arbitrator Kowalski summarized the Law Society of Upper Canada’s finding that Mr. Sinclair lacked the good character requirement to be a licensed paralegal:

In a decision dated January 5, 2010, a Law Society Hearing Panel dismissed Mr. Sinclair’s application for a paralegal license following its finding that Mr. Sinclair lacked good character. Mr. Sinclair’s failure to meet the good character requirement was based on a number of things: seven criminal convictions; his having been banned by different Justices of the Peace from appearing as an agent in their courts; and a finding by a Superior Court Justice that Mr. Sinclair was a vexatious litigant. In an appeal decision dated November 2, 2010, a Law Society Appeal Panel upheld the decision to deny Mr. Sinclair a license, accepting the Hearing Panel’s finding that Mr. Sinclair showed “no hint of rehabilitation or regret” to what it wrote was a pattern of criminal convictions and abusive conduct as both an agent and litigant in the courts.

Arbitrator Kowalski found that, notwithstanding the Law Society’s finding that Mr. Sinclair did not meet the Law Society’s good character requirement to be licensed, Mr. Sinclair may be exempt from the licensing requirement if he was acting as the Applicant’s friend. Further in her decision letter dated December 1, 2016² sent to both the Applicant and Mr. Sinclair, Arbitrator Kowalski advised that pursuant to section 23 of the Statutory Powers and Procedures Act, and Rule 9.9 of the Dispute Resolution Practice Code, Mr. Sinclair may be excluded from the hearing if he is not competent to properly represent and advise the Applicant. I note that Rule 9.9 further provides that Mr. Sinclair can be excluded from the hearing room if “ …[he] does not understand and comply with the Rules and the duties and responsibilities of a representative, agent, or advisor.”

Mr. Sinclair’s Lack of Competence.

At the hearing on March 27, 2017, Mr. Sinclair had a lack of understanding of the law regarding the legal test for income replacement benefit, which is the sole claim advanced in this application. When I asked him if he knew what the Applicant would have to prove to be successful, he didn’t have even a basic understanding of insurance law or the relevant legal test, rather he cited Dunsmuir and stated that every arbitrator has the right to make their own decision. Mr. Sinclair also quoted the British North America Act and the ‘law of Saskatchewan’, which are not directly applicable to the resolution of this application in accordance with the Schedule.

I find that Mr. Sinclair lacks the requisite legal understanding and competence to represent and advise the Applicant. Therefore, in accordance s. 23(3) of the SPPA and Rule 9.9 of the Code, Mr. Sinclair is excluded.

Mr. Sinclair’s Lack’s Instruction from the Applicant

Even if I did not exclude Mr. Sinclair due to lack of competence, he would still be excluded because he did not have any instructions from the Applicant about how to proceed. (I am not even satisfied that he made reasonable efforts to secure instructions about how to proceed.) At the hearing on March 27, 2017, Mr. Sinclair stated that he had not spoken with the Applicant since July 2016. This means he does not have any instructions on how to proceed in response to Arbitrator Kowalski’s decision letter dated December 1, 2016, or her production order contained in her February 8, 2017³ letter which also provided the Applicant with Notice of Intention to Dismiss the Applicant’s application. Nor has Mr. Sinclair made any effort to understand and comply with the Code and the duties and responsibilities of a representative, agent, or advisor, as required by Rule 9.9. When I asked Mr. Sinclair what steps he had taken to contact the Applicant after Arbitrator Kowalski’s decision letter dated December 1, 2016, and her production order contained in her February 8, 2017 letter, he stated that he had not contacted her, nor had he expended any effort to assist the Applicant to comply with Arbitrator Kowalski’s production order.

In conclusion, I find that Mr. Sinclair may not represent the Applicant in these proceedings. I find that Mr. Sinclair lacks the requisite competence and knowledge to represent the Applicant, and he clearly does not understand or comply with the responsibilities of an advocate, advisor, or agent. He did not have any instructions from the Applicant, nor had he made any effort to comply with the duties and responsibilities of a representative, agent, or advisor as required by Rule 9.9 of the Code. Consequently, Mr. Sinclair is barred from appearing in the capacity of representative, agent, or advisor in any further stage of this proceeding.

Should this application be dismissed?

The SPPA gives the Tribunal discretion to control its own process to prevent an abuse of process.⁴ For the reasons that follow, I find that it would be an abuse of process to allow this proceeding to continue.

The accident which forms the basis of this claim is stated to have occurred in 2005. The mediation regarding the claim for income replacement benefits took place on or about August 28, 2014. The application for arbitration was filed on October 3, 2014.

FSCO had to pursue the Applicant and Mr. Sinclair for more than one year just to set up a date for the pre-hearing conference (which neither the Applicant nor Mr. Sinclair attended). On June 18, 2015, FSCO’s Case Administrator sent a letter to the Applicant and to the Insurer’s counsel requesting the parties to set a date for the pre-hearing. It provided numerous dates and times for the pre-hearing. The Case Administrator noted that by June 17, 2015, she had left fifteen messages for the Applicant, and that the Applicant had not returned the Case Administrator’s call. There is no evidence, or any indication that the Applicant intends to proceed with this application. She has not contacted FSCO to inquire about the status of her application, or to provide FSCO with current contact information. Even if Mr. Sinclair once had instructions to represent the Applicant as a friend, which is in some doubt, based on his own evidence Mr. Sinclair has not spoken to the Applicant for almost one year, does not have the Applicant’s current phone number, or even know where in Ethiopia the Applicant resides. In the last seven years, no documents have been provided to the Insurer in support of the Applicant’s claim, even though they were ordered to be produced. I note that as far back as October 22, 2008⁵, a William & Partners, Forensic Accountants’ report indicated that they lacked required information to do a full and proper assessment of the Applicant’s claim for income replacement benefits and requested the Applicant’s taxation documentation to be provided. This documentation was never provided.

On the grounds of the Applicant’s lack of participation, or any demonstrated ongoing interest in proceeding with this application, non-compliance with a production order relating to evidence material to the Applicant’s claim for income replacement benefits, or any reliable evidence secured from the time the application was mediated onward to indicate that she is entitled to her claim, it would be an abuse of process to prolong the hearing any further, and I am exercising my discretion under section 23 of the SPPA to dismiss the application.

I note that Arbitrator Kowalski’s February 8, 2017 letter, mailed to the last known address of the Applicant, which was also mailed to Mr. Sinclair and the Insurer’s representative, Arbitrator Kowalski put the Applicant on notice that she intended to dismiss the arbitration without a hearing pursuant to Rule 68 of the Code, based on the Applicant’s non participation in the arbitration proceeding since it was commenced. Further, the Applicant was put on notice that if the Applicant objected to having the arbitration dismissed without a hearing, the Applicant was to advise FSCO in writing before February 28, 2017. Neither the Applicant, nor Mr. Sinclair advised FSCO in writing that there was an objection to dismissing the arbitration without a hearing. As FSCO is entitled to rely on the last known address of the Applicant, and Arbitrator Kowalski had provided notice of the intent to dismiss the application without a hearing, in compliance with the Code, this is also grounds to dismiss the application.

Is Royal & SunAlliance Insurance Company of Canada entitled to its expenses?

On March 27, 2017, the Insurer asked for its expenses.

I am not satisfied that it is appropriate to require the Applicant to pay the Insurer’s expenses, as it is not clear what, if any, instructions she gave Mr. Sinclair, and it appears that Mr. Sinclair has been the author prolonging and drawing out this proceeding.

The Insurer requested that Mr. Sinclair personally pay its expenses. Section 282 (11.2) of the Insurance Act provides that a representative may be personally ordered to pay expenses/costs if the representative conducted the proceeding without authority of the insured person, or advanced a frivolous or vexatious claim on behalf of the insured person, or causes expenses to be incurred without a reasonable cause or other default. Mr. Sinclair objected to the Insurer’s request and submitted that he should not be required to personally pay the Insurer’s expenses. He did not provide me with any persuasive reason why I shouldn’t order expenses against him.

Mr. Sinclair signed the application as the Applicant’s representative. Since the application was filed, the only individual to show up at a proceeding has been Mr. Sinclair. Arbitrator Kowalski noted in her letter dated December 1, 2016, incorporated by reference as Schedule B, that Mr. Sinclair gave his undertaking that he would go to the Applicant’s sister’s restaurant and provide FSCO with the Applicant’s new contact information no later than June 15, 2016. FSCO has not received any updated contact information for the Applicant. When I asked Mr. Sinclair about this undertaking and specifically advised him that FSCO had not received any updated contact information for the Applicant, he asserted that he provided this information to FSCO, but unfortunately he did not retain the information and no longer has the Applicant’s phone number. He did not know the name of the Applicant’s sister, the name of her restaurant, or the exact location of the restaurant. He did not know the name of the Applicant’s son as previously suggested. I find Mr. Sinclair’s explanation to be implausible. If he had truly attended at the Applicant’s sister’s restaurant, it would be reasonable for him to recall at the very least the Applicant’s sister’s name, the name of the restaurant, or its location. I find that Mr. Sinclair lacks credibility and do not believe that he has had any contact with the Applicant, or her family in recent years. I do not believe that he has any way of contacting the Applicant. Indeed, when I offered to stand the hearing down so that he could make another attempt to find a way to contact the Applicant or her family, he said that it wasn’t necessary. But for the actions of Mr. Sinclair, this proceeding would have been resolved a long time ago. The Insurer needlessly incurred expenses, on a proceeding for which Mr. Sinclair had no instructions, or competence to proceed with.

I agree with Arbitrator Wilson’s decision in McCormack and Aviva Canada Inc. (FSCO A04-002722, June 13, 2016) that expenses should only be ordered against representatives if their conduct is egregious. I find that Mr. Sinclair’s actions, in not complying with his undertaking to Arbitrator Kowalski and lying about it, and in prolonging this arbitration especially without instruction from the Applicant amounts to an inexcusable misconduct. Due to the lack of productions to the Insurer, the Insurer’s expenses in preparing a response to the claim and in attending the hearing are limited. I fix the expenses at $1,000.00. Mr. Sinclair shall forthwith personally pay these expenses to the Insurer.

June 30, 2017

Caroline King Arbitrator

Date