Neutral Citation: 2017 ONFSCDRS 7 FSCO A15-005798

BETWEEN:

DHAKEAA ABBAS Applicant

and

AVIVA CANADA INC. Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Isabel Stramwasser Heard: By written submissions received September 22, 2016

Appearances: Samia Alam for Mrs. Abbas Meredith Harper for Aviva Canada Inc.

Issues:

The Applicant, Dhakeaa Abbas, was injured in a motor vehicle accident on July 26, 2013. She applied for statutory accident benefits from Aviva Canada Inc., payable under the Schedule.¹ Disputes arose concerning her entitlement to benefits. The parties were unable to resolve their disputes through mediation and, in August 2015, Mrs. Abbas applied for arbitration at the Financial Services Commission of Ontario ("FSCO") under the Insurance Act.² Following a pre-hearing discussion on March 1, 2016, the parties identified and agreed that the substantive issue in dispute was whether Mrs. Abbas was entitled to payments for the cost of examinations.

Subsequently, Mrs. Abbas sought to add the issue of non-earner benefits to this arbitration. Aviva brought a motion precluding her from doing so at a resumption of pre-hearing discussion held on July 19, 2016.

Notably, Mrs. Abbas had applied for mediation of the non-earner benefits issue in November 2015 and Aviva had consented to fail the mediation later that month. However, FSCO did not issue the Report of Mediator confirming the failed mediation until after April 1, 2016 and Mrs. Abbas did not ask FSCO to add the issue until after receiving the mediator's report. Aviva then took the position that no issues could be added after April 1, 2016, date on which amendments to the Insurance Act took effect. As a result, Mrs. Abbas reluctantly filed an application for arbitration of non-earner benefits before the Licence Appeal Tribunal (the "LAT") although, by then, she was outside the limitation period for filing that application.

On November 21, 2016, I wrote to the parties advising that my decision in this matter and in the related case of Tahseen Al-Khunfusi and Aviva Canada Inc. (FSCO A15-007963, January 9, 2017) were ready for immediate release, but that there was an appeal pending by the Director's Delegate in the case of Aviva Canada Inc. and Duong (FSCO A13-008284, May 31, 2016), which could be relevant. Aviva responded in November 2016 that it wished to wait for the appeal. Six weeks later, on January 3, 2017, Mrs. Abbas requested immediate release of my decisions because there was a concurrent proceeding at the LAT on the limitation issue with a hearing date of January 17, 2017. In the circumstances, I no longer deemed it appropriate to continue waiting for the appeal. I gave Aviva the choice to pursue its motions (in which case I would release my decisions forthwith) or withdraw them (with leave to bring them before me at a future date and refer to prior submissions, in the interest of efficiency). On January 6, 2017, Aviva chose to pursue its motions.

Consequently, I must decide the following preliminary issue:

Is Mrs. Abbas precluded from adding an issue to this arbitration after April 1, 2016?

Result:

Mrs. Abbas is not precluded from adding an issue to this arbitration after April 1, 2016.

EVIDENCE AND ANALYSIS:

Aviva's burden of proof

In order to show that Mrs. Abbas is precluded from adding an issue to this arbitration, Aviva must prove, on a balance of probabilities, that FSCO does not have the jurisdiction to add issues after April 1, 2016. Failing that, Aviva must prove that it is more likely than not that unfairness would result from adding an issue after that date. I address both matters in this decision.

FSCO has the jurisdiction to add issues to existing arbitrations

The issue failed at mediation

It is undisputed that the issue in question failed at mediation and that this meets a prerequisite for arbitration. As noted above, Mrs. Abbas applied for mediation of the non-earner benefits issue in November 2015 and Aviva consented to fail the mediation later that month. The mediation report is dated April 20, 2016 and amended May 12, 2016. Consequently, the issue meets the jurisdictional criterion under subsection 281(2) of the Insurance Act, which provides that issues must fail at mediation before they may go to arbitration.

Although the mediation report was not issued until after April 1, 2016, the mediation is deemed to have failed before April 1, 2016. The Ontario Court of Appeal in Hurst v. Aviva Insurance Company³ clarified that the effect of section 280(7) of the Insurance Act is that mediation is deemed failed 60 days after mediation is sought, even if the Report of Mediator has not been issued. Given that Mrs. Abbas applied for mediation in November 2015, her mediation is deemed failed sixty days later, in January 2016.

By extension, Mrs. Abbas could have asked to add the issue of non-earner benefits to her FSCO arbitration after the 60-day limit had passed in January 2016. It is clear from Hurst that applicants need not wait for a Report of Mediator before commencing arbitration proceedings. However, Mrs. Abbas made the written request to add the issue on May 27, 2016, after receiving the Report of Mediator.

The parties did not introduce evidence regarding why FSCO delayed in issuing a Report of Mediator or why Mrs. Abbas delayed in requesting that the issue be added. But the dates of those events are irrelevant to my analysis, in any event. Aviva did not address them in its submissions.

The fact that Mrs. Abbas sought to fail the issue at mediation is a clear indication of her intention to have it heard at FSCO. Only FSCO requires mediation before arbitration. There is no requirement that issues be mediated before going to arbitration at the LAT. (In fact, FSCO stopped accepting mediation applications on April 1, 2016 and stopped processing mediations in July 2016).

Common practice

FSCO has a longstanding and accepted practice of adding issues to existing arbitrations. The practice has often benefited insurers. For instance, insurers do not have to pay another assessment fee of $3,000.00 when adding new issues to existing arbitrations.

Supported by the Code

I am satisfied, as was Arbitrator Alves in the case of Little and Pembridge Insurance Company,⁴ that the practice of adding issues is permitted by the Dispute Resolution Practice Code.⁵ Rule 1.1 of the Code provides that the rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute. Arbitrator Alves notes that the practice of adding issues and scheduling all of them for one hearing is less costly to the parties and therefore contributes to the least expensive resolution of the dispute, as required by this rule. She adds that the practice makes efficient use of the Commission's resources and, as there is but one hearing, avoids inconvenience to witnesses who would otherwise be required to give evidence at multiple proceedings. I agree with her reasoning. Whether the evidence of witnesses goes in by way of affidavit or viva voce testimony, it is still an inconvenience to require it twice.

While there is no specific provision in the Code governing the adding of issues to an arbitration, I agree with Little and Pembridge that the practice is permitted by considering two rules of the Code together. Rule 15.2 allows either party to add issues to a mediation and Rule 1.2 provides that, where something is not specifically provided for in the Rules, the practice may be decided by referring to similar Rules in the Code. Little and Pembridge examines Rules 1.2 and 15.2 and states the following:

It would appear then that the practice of adding issues, based on a written request which identifies the new issues, has been adopted in the Arbitration Unit based on the practice permitted in Rule 15. 2 of the Dispute Resolution Practice Code and the application of Rule 1.2. As mediators do not have the authority to determine a dispute, Rule 15.2 provides for the addition of issues, on consent of all parties, where the request is made less than ten days before the scheduled date of the mediation meeting. Arbitrators have the authority to determine such disputes and do so.

I take Arbitrator Alves to mean that, while consent is required to add issues to a mediation, it is not required to add issues to an arbitration. Mediators did not have the jurisdiction to adjudicate disputes. Arbitrators do. I adopt this line of reasoning and conclude that an arbitrator has the jurisdiction to add issues to an arbitration without the consent of the parties.

Legitimate Expectation

I also find that the practice of adding issues has been so commonplace as to have established a legitimate expectation that it continue. Arbitrator Alves expresses a similar view in her decision:

In my view, that practice has given rise to a legitimate expectation of parties that the Commission will continue that practice and not abandon it without notice to parties and their representatives.

She cites Baker v. Canada (Minister of Citizenship and Immigration)⁶ in which the Supreme Court of Canada held that the doctrine of legitimate expectation is established by the regular practices of administrative decision-makers:

This doctrine, as applied in Canada, is based on the principle that the "circumstances" affecting procedural fairness take into account the promises or regular practices of administrative decision-makers, and that it will generally be unfair for them to act in contravention of representations as to procedure, or to backtrack on substantive promises without according significant procedural rights.

Like Arbitrator Alves in Little, I adopt the Supreme Court's rationale to these facts. It would be unfair to change the practice of adding issues without prior notice. As FSCO has not provided any such notice, fairness requires that arbitrators continue the practice.

Aviva argues the opposite — that the April 2016 amendments created an expectation in the industry that new issues may not be added to existing arbitrations. I give little weight to this argument. Aviva did not lead evidence or argue that there is a regular and established practice at FSCO of prohibiting parties from adding issues to existing arbitrations after April 1, 2016. Furthermore, the practice of adding issues was common at FSCO long before April 2016 and, as such, appears to me to be more established than any expectation that may have been created after the April 2016 amendments. As such, the expectation that the practice continue is more reasonable and legitimate, in my view, than any expectation to the contrary.

Supported by the SPPA

In addition, I agree with Mrs. Abbas that FSCO's practice of adding issues is supported by its obligations to uphold procedural fairness under the Statutory Powers Procedure Act.⁷ Section 2 of the SPPA provides that the SPPA, and any rule made by a tribunal, shall be liberally construed so as to secure the just, most expeditious and cost-effective determination of every proceeding on its merits. The SPPA also grants a tribunal the power, under subsection 25.0.1, to determine its own procedures and practices and, for that purpose, permits tribunals to make orders with respect to the practices and procedures that apply in any particular proceeding.

Consequently, I reject Aviva's assertion that FSCO would breach section 2 of the SPPA by adding issues to arbitrations. This argument delegitimizes FSCO's processes and procedures. If Aviva were correct, then FSCO would have been in breach of the SPPA for years.

Adding issues is not the same as filing new applications for arbitration

In arguing that FSCO lacks the jurisdiction to add issues after April 1, 2016, Aviva conflates the terms "applications for arbitration" and "adding issues." Amendments to the Insurance Act require parties to bring new applications for arbitration to the Licence Appeal Tribunal after April 1, 2016. However, the amendments make no mention of what to do with requests to add issues after April 1, 2016 to arbitrations already underway at FSCO.

Aviva takes the position that a new issue must be the subject of a new application for arbitration. According to Aviva, FSCO does not otherwise have the jurisdiction to adjudicate it. This position ignores FSCO's longstanding practice of adding issues to existing applications.

FSCO and the LAT have concurrent jurisdiction

Aviva cites Honda Canada Inc. v. Keays⁸ to argue that Mrs. Abbas' non-earner benefit claim must be heard at the Licence Appeal Tribunal and may not be heard at FSCO. In Keays, the Supreme Court of Canada held that breaches to the Ontario Human Rights Code were not actionable in common law courts because the legislature had created a separate and comprehensive scheme for discrimination claims under the human rights statute. The legislature had not intended for claimants to use the Human Rights Code to support punitive damages in the court system.

The case is not on point here, where the Ontario legislature created concurrent schemes for adjudicating accident benefit claims at both FSCO and the LAT. Each scheme is separate and comprehensive and, in accordance with the transitional provisions of the Insurance Act, the legislature intended that the two tribunals operate concurrently for a short period while FSCO winds down its operations. During the transition period, each tribunal maintains the legitimacy and integrity of its own adjudicative processes.

Legislative intent

Aviva argues that, if the legislature had intended for FSCO to add issues after April 1, 2016, it would have so expressly legislated. However, that is not my understanding of the rules of statutory interpretation in consumer protection legislation. Rather, any limitations on the rights of insured persons must be made explicit.

It follows that only a clear and unambiguous statement in the statute that parties may not continue the practice of adding issues to FSCO arbitrations after April 1, 2016 can support an interpretation favourable to Aviva. Nowhere in the Insurance Act is there mention of the practice of adding issues to an arbitration. It is settled law that, where there is a doubt in legislation establishing and governing coverage and there are two possible interpretations of any aspect of coverage, the one more favourable to the insured should govern: July et al. v. Neal (1986).⁹ The explanation for this principle is that contracts are interpreted contra proferentem (or "against the drafting party") because the insurance industry has input into the content of the legislation, while individual insured persons have none. As such, if there is an ambiguity in the Insurance Act regarding whether a new issue may be added to an arbitrations, such an ambiguity must be resolved in favour of the insured.

Adding an issue to this arbitration is the fairest way of hearing it

Avoids duplication

To the extent that Mrs. Abbas seeks to consolidate her claims at FSCO by adding an issue to her arbitration, I am persuaded that she is justified in doing so. Adding the issue of non-earner benefits to the existing arbitration avoids unnecessary duplication of proceedings. Hearings are costly to the parties and, where possible, one hearing should be held, instead of multiple ones. It is cheaper for the parties, more convenient for the witnesses and makes better use of adjudicative resources.

While Aviva acknowledges that a multiplicity of proceedings should generally be avoided, it says that the issue of non-earner benefits is new, discrete and "in no way" connected or affected by the determination of issues currently in dispute. I reject that argument. To have the same parties bring the same evidence of the same injuries from the same accident to two different tribunals is indisputably a duplication of resources for the parties, witnesses, the tribunals and any reviewing bodies. There are issues of credibility, causation and disability common to both. To allow separate proceedings creates a risk of inconsistent findings and increases costs for the parties and the administration of justice.

Avoids significant prejudice to Mrs. Abbas

Importantly, there is a risk of irreparable harm to Mrs. Abbas if she is required to proceed at another forum from which she may be barred because of a missed limitation period. Mrs. Abbas did not bring her application for arbitration of non-earner benefits to the LAT until July 15, 2016, six weeks after the expiry of the limitation period on June 9, 2016. This means that, if the LAT determines her application to be time-barred, she may never be able to claim non-earner benefits.

Aviva argues that requiring Mrs. Abbas to pursue the non-earner benefit claim at the LAT does not extinguish her rights. However, this argument ignores the potential limitation issue. To require her to proceed at the LAT could place Mrs. Abbas in an impossible position: her non-earner benefits claim could be extinguished. The Ontario Court of Appeal in Gordyukova v. Certas Direct Insurance Company¹⁰ maintains that it is important to avoid placing the insured in an impossible situation.

There is no change of forum

Aviva cites Gordyukova to the effect that an insured may not change fora after the expiry of a limitation period. However, it cannot properly be said that Mrs. Abbas is seeking a change of forum from the LAT to FSCO. Rather, her first choice of forum was FSCO. Furthermore, she made the request to add the issue to her FSCO application in a letter dated May 2016, before the expiry of the limitation period in June 2016. Mrs. Abbas only filed a second application at the LAT out of an abundance of caution, compelled by Aviva's position. Gordyukova supports the principle that the choice of forum always rests with the insured.

Aviva paraphrases Gordyukova in speculating that, if parties were allowed to transfer issues from the LAT to FSCO, nothing would prevent a claimant at the LAT from deciding, on the eve of an arbitration, to change fora and seek to have the matter heard at FSCO. Aviva says that the arbitration dates would be wasted, the matter delayed and the only potential sanction would be an order for costs of the discontinued proceeding.

However, this is not a situation where the Applicant is seeking to transfer an issue from the LAT to FSCO. On the contrary, this is a situation where the applicant started the process at FSCO in November 2015 with the intention that the non-earner benefit issue form part of her existing application at FSCO, which had been commenced a few months prior, in August 2015. To add the non-earner benefit issue would not be to transfer it from one forum to another. Rather, it would involve withdrawing the issue from the LAT and simply continuing the existing process at FSCO.

There is no significant prejudice to Aviva

Aviva argues that it will suffer prejudice if the issue of non-earner benefits is added to this arbitration. It submits that a change of forum would result in costs thrown away. Yet, I find that any such prejudice is not significant. As above, I am not persuaded that adding an issue to a FSCO arbitration is more expensive than pursuing multiple arbitrations. I also found that Mrs. Abbas was compelled by Aviva's position to commence multiple proceedings. It follows, on the evidence before me, that any costs thrown away due to a multiplicity of proceedings lie at Aviva's feet. However, I leave adjudication of that matter to the arbitrator who may hear additional evidence and argument at an expense hearing. If there are cost consequences, they may be properly addressed at an expense hearing.

Conclusion

For these reasons, I am satisfied that I have the jurisdiction to add an issue to this arbitration and that to do so is the fairest way of proceeding.

I dismiss Aviva's preliminary issue motion precluding Mrs. Abbas from adding an issue after April 1, 2016.

EXPENSES:

I leave the expenses of this preliminary issue hearing in the discretion of the hearing arbitrator.

January 9, 2017

Isabel Stramwasser Arbitrator

Financial Services Commission of Ontario