minicounsel

Footnotes

The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
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
(FSCO A11-001373, February 8, 2016)
(Fourth Edition—Updated January 2014)
1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817 at paragraph 26
R.S.O. 1990, c.S22
1986 CanLII 149 (ON CA); 57 O.R. (2d) 129; 32 D.L.R. (4th) 463 (C.A.); [1986] O.J. No. 1101

Neutral Citation: 2017 ONFSCDRS 8

FSCO A15-007963

BETWEEN:

TAHSEEN AL-KHUNFUSI Applicant

and

AVIVA CANADA INC. Insurer

DECISION ON A PRELIMINARY ISSUE

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

Appearances: Samia Alam for Mr. Al-Khunfusi Meredith Harper for Aviva Canada Inc.

Issues:

The Applicant, Tahseen Al-Khunfusi, was injured in a motor vehicle accident on July 26, 2013. He applied for statutory accident benefits from Aviva Canada Inc., payable under the Schedule.¹ Disputes arose concerning his entitlement to benefits. The parties were unable to resolve their disputes through mediation and, in November 2015, Mr. Al-Khunfusi applied for arbitration at the Financial Services Commission of Ontario ("FSCO") under the Insurance Act.² At a pre-hearing discussion on July 19, 2016, the parties identified and agreed that the substantive issues in dispute were whether Mr. Al-Khunfusi was entitled to receive a non-earner benefit, medical benefits and payment for the cost of an examination.

Subsequently, Mr. Al-Khunfusi sought to add the cost of two examinations to this arbitration. At the pre-hearing discussion, Aviva brought a motion precluding him from doing so.

Notably, Mr. Al-Khunfusi had applied to mediate the issue on February 12, 2016. However, FSCO did not issue the Report of Mediator confirming the failed mediation until June 10, 2016 and Mr. Al-Khunfusi did not ask FSCO to add the issues until July 6, 2016. 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.

On November 21, 2016, I wrote to the parties advising that my decisions in this matter and in the companion case of Dhakeaa Abbas and Aviva Canada Inc. (FSCO A15-005798) 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, Mr. Al-Khunfusi requested immediate release of my decisions because there was a concurrent proceeding at the Licence Appeal Tribunal (the "LAT") in the companion case 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 of pursuing its motions (in which case I would release my decisions forthwith) or withdrawing 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 Mr. Al-Khunfusi precluded from adding issues to this arbitration after April 1, 2016?

Result:

Mr. Al-Khunfusi is not precluded from adding issues to this arbitration after April 1, 2016.

EVIDENCE AND ANALYSIS:

Aviva's Burden of Proof

In order to show that Mr. Al-Khunfusi is precluded from adding issues to the 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 issues 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, Mr. Al-Khunfusi sought mediation of the examinations in February 2016 and the failed mediation report is dated June 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 going to arbitration.

Although the Report of Mediator was not dated until after April 1, 2016 and although Mr. Al-Khunfusi did not make his request to add the issue until after April 1, 2016, the dates of those events are not relevant to my analysis. Aviva did not raise them in its submissions.

The fact that Mr. Al-Khunfusi sought mediation at FSCO without setting a mediation date is an indication of his intention to have the mediation fail and have the matter 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 arbitrations. The practice has often benefited insurers. For instance, insurers do not have to pay a new arbitration 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,³ that the practice of adding issues is permitted by the Dispute Resolution Practice Code.⁴ 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 inconvenient 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 together. Rule 15.2 of the Code 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 them both 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)⁵ 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 issues may not be added to existing arbitrations. I give little weight to this argument. Aviva did not lead evidence or argue that there has been a regular and established practice at FSCO of prohibiting parties from adding issues after April 1, 2016. Moreover, 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 Mr. Al-Khunfusi that FSCO's practice of adding issues is supported by its obligations to uphold procedural fairness under the Statutory Powers Procedure Act.⁶ 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.

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).⁷ 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 existing arbitration, 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 Mr. Al-Khunfusi seeks to consolidate his claims at FSCO by adding an issue to his arbitration, I am persuaded that he is justified in doing so. Adding an issue 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 submits that the issues of the cost of examinations are new, discrete and "in no way" connected or affected by the determination of issues currently in dispute. Aviva adds that there is "no risk" of inconsistent findings between the LAT and FSCO regarding Mr. Al-Khunfusi's entitlement to treatment above the MIG limits.

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.

Moreover, Mr. Al-Khunfusi already has a claim for repayment of examinations before FSCO in this arbitration. His request to add two more examinations to the arbitration flows naturally from the existing issue in dispute.

There is no significant prejudice to Aviva

Aviva argues that it will suffer the prejudice of increased costs if the issue is added to this arbitration. I find any such prejudice insignificant. As noted above, I am not persuaded that it is more cost-efficient for the parties to engage in multiple proceedings than simply to add an issue to an existing proceeding. In any event, 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 Mr. Al-Khunfusi 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

Date

Financial Services Commission of Ontario