Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2017 ONFSCDRS 20
Appeal P16-00040
OFFICE OF THE DIRECTOR OF ARBITRATIONS
ARNAND MURTTY
Appellant
and
SECURITY NATIONAL INSURANCE CO./ MONNEX INSURANCE MGMT. INC.
Respondent
BEFORE:
Delegate Jeffrey Rogers
REPRESENTATIVES:
Mr. Arnand Murtty, representing himself Mr. Patrick Ho, solicitor for Security National
HEARING DATE:
December 15, 2016
VARIATION/REVOCATION ORDER
Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, R.R.O. 1990, as amended, it is ordered that:
This application for variation/revocation is dismissed.
Mr. Murtty shall pay Security National its expenses of the application in the amount of $2,500.
January 24, 2017
Jeffrey Rogers Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPLICATION
Mr. Murtty seeks to vary or revoke the order of Arbitrator Muzzi of July 22, 2011 and the appeal order of Director’s Delegate Blackman dated July 19, 2012. Arbitrator Muzzi ruled that Mr. Murtty was precluded from proceeding to arbitration because his application was an abuse of process. On appeal, Delegate Blackman upheld that ruling.
For the reasons that follow, I find that the “new evidence” that Mr. Murtty claims would lead to a different result is not new. I further find that this evidence would not lead to a different outcome. This application is therefore dismissed.
II. BACKGROUND
This matter has a long history at the Commission. It arises from a motor vehicle accident on November 17, 1995 in which Mr. Murtty was injured. He applied for and was paid statutory accident benefits by Security National. Security National terminated payment of income replacement benefits on May 11, 1997. Mr. Murtty disagreed with the termination and he applied for mediation. Mediation did not resolve the dispute and he applied for arbitration in December 1997. An Arbitrator dismissed Mr. Murtty’s claim for interim benefits in August 26, 1998. Later that month the parties entered into settlement discussions with the assistance of an Arbitrator and agreed to settle Mr. Murtty’s claim for accident benefits for $140,500.
In 1999, Mr. Murtty again applied for mediation at the Commission and then, in October 2000, for arbitration. He claimed a disability pension which he said was not part of the settlement agreement. An Arbitrator ordered a preliminary issue hearing on the question of whether Mr. Murtty was precluded from proceeding because of the settlement. The hearing did not proceed. In March 2001, Mr. Murtty advised the Commission that he was not proceeding with the arbitration. The Commission therefore closed its file in April 2001.
Mr. Murtty revived the claim 10 years later. In July 2010, he filed once again for arbitration at the Commission, attaching the same Report of Mediator he had filed with his application in October 2000. The matter came before Arbitrator Muzzi in a preliminary issue hearing to decide whether Mr. Murtty was precluded from proceeding to arbitration. In her July 22, 2011 decision which Mr. Murtty seeks to vary or revoke, Arbitrator Muzzi held that Mr. Murtty was precluded from proceeding to arbitration on the basis of the 1998 settlement or, in the alternative, because his application was an abuse of process. Mr. Murtty appealed.
In a decision dated July 19, 2012, Delegate Blackman dismissed the appeal. He held that Mr. Murtty was not precluded from proceeding to arbitration on the basis of an enforceable settlement agreement. However, he confirmed Arbitrator Muzzi’s finding that Mr. Murtty was precluded from proceeding because his application was an abuse of process.
On October 1, 2012, Mr. Murtty applied to vary or revoke both Arbitrator Muzzi’s order and Delegate Blackman’s decision upholding it. Delegate Blackman dealt with the application. He found that there was no error in the orders, that there was no material change in Mr. Murtty’s circumstances and no evidence, not available at the arbitration of appeal, had become available. In a decision dated June 13, 2013, he rejected the application because it did not fall within the grounds set out in subsection 284(3) of the Insurance Act. He ordered Mr. Murtty to pay Security National its legal expenses of the application in the amount of $1,500. Mr. Murtty has not paid these expenses.
On April 14, 2016, Mr. Murtty again applied to vary or revoke the orders of Arbitrator Muzzi and Delegate Blackman. On April 27, 2016, Delegate Blackman summarily rejected that Application. He found that it was incomplete, lacked sufficient detail to allow Security National to respond, and it repeated the prior, rejected application.
On May 11, 2016, Mr. Murtty filed the further application which is the subject of this decision. He again seeks to vary or revoke the decisions of Arbitrator Muzzi and Delegate Blackman. By letter dated June 3, 2016, Delegate Blackman acknowledged the application without determining whether it complied with the requirements of subsection 284(3). Delegate Blackman has since retired and the file was transferred to me.
III. ANALYSIS
Preliminary Ruling
The hearing in this matter was held on December 15, 2016. On December 13, 2016, Security National for the first time informed the Commission that it took the position that this application should be dismissed as an abuse of process. The reason Security National gave for its position was Mr. Murtty’s failure to pay the legal expenses in the amount of $1,500, as Delegate Blackman ordered on June 13, 2013. At the beginning of the hearing, Security National made an oral motion seeking dismissal. Mr. Murtty claimed that he received advice that he has no obligation to pay the expenses as ordered because Security National missed a 30-day period in which it was required to give him notice of the order.
I declined to hear the motion. I agreed with Security National that Mr. Murtty’s failure to pay the expenses was relevant to whether this application should be dismissed as an abuse of process. I ruled however, that the motion was brought too late in the process. Hearing it would require an adjournment. As a result, it was more expeditious and less expensive to proceed with the hearing on the merits, than to insert the additional, time consuming step of hearing the motion.
No “new evidence”
There are three grounds upon which an order may be varied or revoked under subsection 284(3) of the Insurance Act and section 61 of the Dispute Resolution Practice Code. They are:
there has been a material change in the circumstances of the insured
evidence not available on the arbitration or appeal has become available, or
there is an error in the order
Mr. Murtty relies on the second ground, usually referred to as the “new evidence” ground. Jurisprudence defines the scope of this ground. Not all evidence acquired after a hearing qualifies as “new evidence”. The jurisprudence recognizes that there is a public interest in having a finite end to the adjudication process. Parties are therefore required to exercise due diligence in preparing for the initial hearing.
Director Draper summarized the scope of the “new evidence” ground in Lanctot and Zurich Insurance Company, as follows:
the party seeking variation still has to show that the evidence could not have been obtained for the original hearing by due diligence and that, if it had been available, likely would have had an important influence on the outcome.
The Director endorsed the earlier statement by Director’s Delegate Naylor that:
“[t]he legislation places limits on when an order may be reviewed in the interests of ensuring that, in an adversarial process, the parties prepare adequately for the hearing and to secure a finite end to the adjudication process.” 1
In my view, the “due diligence” requirement applies as well to applications to vary or revoke an order. Otherwise, there is no finite end to the adjudication process. This being his third application to vary, Mr. Murtty is required to show that, with due diligence, he could not have obtained the proposed evidence in order to support his two earlier applications. He has not done so. This application could be dismissed for that reason alone. Nevertheless, I will review each item of proposed “new evidence” in turn. Mr. Murtty listed seven documents in his application. He confirmed at the hearing that this is a complete list. As I stated earlier, Mr. Murtty has produced no “new evidence”.
- Dr. Koppert’s letter of July 3, 2015 confirming the existence of 1997 report
Dr. Koppert treated Mr. Murtty after his accident. He has maintained throughout his efforts to revive his claim that there exists a 1997 report from Dr. Koppert which is the key to his success and that Security National has failed to provide him with a copy. Security National denies that it retains a copy. This letter of July 3, 2015 was submitted with Mr. Murtty’s last application and Delegate Blackman addressed it in his decision of April 27, 2016 in which he rejected the application. He found no basis for bringing the letter within the terms of subsection 284(3). Delegate Blackman also addressed the missing 1997 report. He wrote:
Mr. Murtty now provides a July 3, 2015 letter from Dr. Koppert. Dr. Koppert states that his report “was from more than fifteen years ago, and has long been destroyed.”
My June 13, 2013 decision stated, at page 6, that at the April 3, 2013 oral hearing, Mr. Murtty stated that he has never seen Dr. Koppert’s report. Therefore, Mr. Murtty was simply speculating that Dr. Koppert confirmed that he was suffering a complete inability to carry on a normal life due to severe cervical spinal cord damage, muscle spasm on the right half of his head, eye and neck and a partially paralyzed right arm.
Mr. Murtty does not provide, with his present Application, a copy of Dr. Koppert’s report of some 15 years ago. As that report has not become available, I do not see how Mr. Murtty’s submission falls within subsection 284(3) of the Insurance Act and section 61 of the Code.
The 1997 report is still not available, so it is not evidence, and the 2015 letter provides no relevant evidence. Therefore, nothing has changed since Delegate Blackman dealt with the issue. My conclusion in this regard is not affected by Mr. Murtty’s submission that Security National must have Dr. Koppert’s report because it has recently produced a note by Dr. Annisette, his associate, dated July 10, 1997.2
Security National has shown that its file is now incomplete but it has never claimed to have no file and it has never addressed the question of whether it had Dr. Annisette’s note. Mr. Murtty claims that the note is further evidence of unfair or deceptive acts by Security National, but nothing in the note itself confirms this. The note was authored before the settlement and refers to back surgery in October 1996. This is a report from Mr. Murtty’s own treatment provider regarding known facts. It is difficult to imagine why Security National would keep from Mr. Murtty information he must surely have known, or how it could have done so. It sheds no light on Security National’s possession of Dr. Koppert’s report or on the possible relevance of that report.
- Mr. Ho’s letter of February 11, 2014
Mr. Ho is counsel for Security National. This letter to Mr. Murtty answers his request for productions, informs him that his requests have been previously answered and tells him that his allegation that records have been withheld is untrue.
The issues before Arbitrator Muzzi and Delegate Blackman were the validity of the settlement and whether Mr. Murtty’s new application for arbitration was an abuse of process. The issue here is whether the determination of an abuse of process should be varied or revoked. I am unable to discern how this letter could have had any bearing on these issues.
The letter touches on a recurring theme in Mr. Murtty’s serial applications to vary: that Security National hid relevant documents from him. Arbitrator Muzzi addressed the issue in her decision. She found that, by the time Mr. Murtty revived his claim in 2010, Security National no longer had a complete insurer’s file and no legal file to consult. That conclusion was inescapable, since Security National could no longer produce a copy of the Settlement Disclosure Notice Mr. Murtty had received, which was important to its claim that Mr. Murtty had entered into a binding settlement agreement.
Delegate Blackman also considered the issue. His determination that Arbitrator Muzzi erred in finding that Mr. Murtty entered into a binding settlement turned in part on the fact that Security National had not produced a copy of the Settlement Disclosure Notice. Delegate Blackman nevertheless found Mr. Murtty’s allegation of concealment of documents to be implausible.
In his decision of June 13, 2013, Delegate Blackman wrote:
It is unclear how the Respondent could hide from the Applicant for a decade and a half reports from the Applicant’s own treating doctors. Under subsection 65(3) of the Schedule, the medical practitioner conducting an IME is personally responsible for providing a copy of his or her report to both the insurer and the insured person. It is unclear how Dr. Koppert’s report was hidden.
It is also difficult to reconcile the Applicant’s submissions with the contemporaneous correspondence. The Applicant’s August 27, 1998 letter, marked at arbitration as part of Exhibit “2”, says that he would respond to the Respondent’s settlement offer after consulting with his lawyer and his accountant. His August 28, 1998 letter, also part of Exhibit “2”, states that he will mail the executed Settlement Agreement after he has consulted with his medical experts.3
Arbitrator Muzzi and Delegate Blackman rejected Mr. Murtty’s theory that Security National hid Dr. Koppert’s report from him. Mr. Ho’s letter of February 11, 2014 simply confirms the position that Security National has taken all along. It denies having deceived Mr. Murtty. This is not new.
The remaining items are:
Dr. Ferguson’s report of April 7, 1997
Dr. Desai’s letter of April 22, 1998
Dr. Borwn’s report of February 6, 1998
Dr. Moulin’s report of March 12, 1998
Dr. Fox’s report of January 27, 1998
I have chosen to address these documents together because they all predate Mr. Murtty’s settlement of his first application for arbitration in August 1998. They were all prepared by Mr. Murtty’s treating physicians, and not at Security’s request. As Delegate Blackman did, I find it “difficult to reconcile” Mr. Murtty’s submission that Security National hid these documents from him and he was unable to obtain them in the decade between their production and the hearing before Arbitrator Muzzi. I am not satisfied that Mr. Murtty’s efforts were thwarted by the fact that he is self-represented, as he claimed. I find that these documents are not “new evidence”.
No different result
In addition to requiring “due diligence” in preparing for the original hearing, Lanctot restricted “new evidence” to evidence that “likely would have had an important influence on the outcome”. The outcome in this case is that Mr. Murtty’s application for arbitration was dismissed as an abuse of process and that result was upheld on appeal. To be considered “new evidence”, the evidence that Mr. Murtty now tenders must be relevant to that outcome and have the potential to change it. I find that it is not relevant and therefore has no potential to change the outcome.
The Arbitrator’s key findings in determining that Mr. Murtty’s application was an abuse of process were:
Mr. Murtty withdrew his application in 2001 because he did not wish to proceed and for no other reason
The evidence did not support Mr. Murtty’s claims that he withdrew his application in 2001 under duress from Security National
The prejudice to Security National in defending the claim is not imaginary. With the lapse of ten years, there was no complete insurer’s file and no legal file to consult
With respect to the issue of prejudice, there is more prejudice to Security National having to defend the claim than there is to Mr. Murtty not having a hearing on the merits
There was no inadvertence in any of Mr. Murtty’s behaviour and actions. There was no evidence of mistake. Mr. Murtty’s claims of lack of knowledge and understanding were not credible and, in any event he did not reasonably explain his inordinate delay in re-filing or otherwise moving this matter to a close earlier
Having already availed himself of the advice of counsel in the past, it was not credible that Mr. Murtty would have waited so many years to make further inquiries and seek advice about the legality of rescinding the settlement agreement, especially when his 2000 Application for Arbitration dealt with essentially the same issue.
The only possibility of relevance to abuse of process that I can discern in the proposed evidence is that it touches on the issue of whether Security National has deceived Mr. Murtty. But the Arbitrator specifically rejected that theory, Delegate Blackman also rejected it on appeal and he later found it to be “difficult to reconcile”. I see no possibility that the proposed evidence would affect the outcome, in view of this history and of the additional findings the Arbitrator made in concluding that Mr. Murtty’s application was an abuse of process.
In my view, the real focus of the proposed evidence is to show that Mr. Murtty has a valid claim on the merits. But the merits of his claim were not in issue before the Arbitrator and she specifically ruled that Security National should not be required to address that issue. The additional passage of time only serves to reinforce the Arbitrator’s reasons for that ruling.
IV. EXPENSES
Security National sought its expenses of this application in the amount of $2,500, if successful. It submitted that the amount was justified by the volume of material Mr. Murtty filed and by the fact that the hearing was held in Ottawa, where Mr. Murtty moved since his last application.
I find that Security National is entitled to its expenses, based upon its complete success. I find the amount claimed to be reasonable in the circumstances. Mr. Murtty is therefore ordered to pay Security National its legal expenses of this application in the amount of $2,500.
January 24, 2017
Jeffrey Rogers Director’s Delegate
Date