Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2018 ONFSCDRS 139
Appeal P17-00002
OFFICE OF THE DIRECTOR OF ARBITRATIONS
SRISELVARANY VAITHEESWARAN
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
David S. Wilson for Mrs. Sriselvarany Vaitheeswaran
Jonathan Schrieder for State Farm Mutual Automobile Insurance Company
HEARING DATE:
July 24, 2018
APPEAL 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:
- The appeal of the Arbitrator’s letter decision of November 29, 2016, is allowed in full, and the decision is vacated. The matter is therefore returned to arbitration.
August 23, 2018
David Evans
Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Mrs. Vaitheeswaran appeals Arbitrator Robinson’s letter decision of November 29, 2016, in which he dismissed the proceeding without a hearing. He found that Mrs. Vaitheeswaran could not proceed to arbitration because all matters had been settled, an order had been issued to that effect, and accordingly the Financial Services Commission of Ontario was functus.
However, the Arbitrator did so without providing notice to Mrs. Vaitheeswaran and without allowing her any time to provide grounds to object to the proposed dismissal.
This was an error of law, and accordingly the appeal is allowed.
II. BACKGROUND
Mrs. Sriselvarany Vaitheeswaran was injured in an accident on October 19, 2007. She claimed various accident benefits pursuant to the SABS–1996,1 including housekeeping and home maintenance benefits. The claims were paid for a time and then terminated, leading to the filing of an arbitration, a pre-hearing, and the scheduling of a hearing date. The Commission closed its file in the fall of 2011 after a settlement, including of the housekeeping claims.
The appeal in this matter arises because Mrs. Vaitheeswaran sought to reopen her file in 2016 to claim further housekeeping benefits.
On August 26, 2016, her counsel, Mr. Wilson, wrote to the Commission requesting it reopen the file. He wrote that the arbitration proceeding commenced by Application dated August 31, 2009 had not been finalized or completed. He noted that the Application for Arbitration was for housekeeping benefits from June 2, 2008 to “ongoing.” However, he wrote, the pre-hearing letter of December 23, 2009, referenced the housekeeping dispute as being for the period June 3, 2008 to October 19, 2009: “Presumably, the limitation of the claim was made in error, as the Application for Arbitration specifically stipulates otherwise.”
The letter further stated that on the scheduled arbitration hearing date of July 11, 2011, the parties reached an agreement, including executing Minutes of Settlement: “With respect to housekeeping, the claim was resolved for the period June 3, 2008 to October 19, 2009 for the sum of $7,200.00, ‘in satisfaction of all claims for said period.’”
An order was subsequently issued dated October 14, 2011. It included a provision that the Insurer was ordered to pay income replacement benefits ongoing. As for housekeeping, it reflected the minutes of settlement and thus stated that the $7,200 was for the period June 3, 2008 to October 19, 2009 “in satisfaction of all claims for said period.”
In his letter, Mr. Wilson averred that the Arbitration hearing was never dismissed. He then states that Mrs. Vaitheeswaran had been found to be catastrophic, but the insurer was disputing that claim and was arranging assessments.
Finally, Mr. Wilson noted that, given Mrs. Vaitheeswaran’s status, she wished to claim further housekeeping benefits from and after October 19, 2009, “in respect of which there has never been an adjudication with respect to the same.”
On September 19, 2016, Janine Macey, Senior Arbitrator, wrote to the parties that Mr. Wilson had requested “this arbitration be re-opened in order to address an issue of housekeeping benefits beyond October 19, 2009, and a new issue of catastrophic impairment.” She went on to note that a preliminary issue would be held to determine whether there was jurisdiction to re-open the file to add these two issues and to deal with any related jurisdictional issues.
I will skip ahead on one topic here. Mr. Wilson had not actually asked to add the issue of catastrophic impairment at that point. In any event, Arbitrator Robinson ultimately held that the catastrophic issue would have to be determined by the LAT. That issue was not appealed, and apparently a LAT proceeding has been commenced.
In any event, Arbitrator Robinson wrote to the parties on September 28, 2016. He suggested that Mr. Wilson’s position raised “a small host of legal issues.” He then stated that he viewed this as “a proper case in which to order a preliminary issue hearing for a determination of the relevant questions of law” and made the following request:
May I please hear from counsel with respect to the two following matters. First, it is my preliminary view that the preliminary issue hearing should proceed on the basis of affidavit evidence and written submissions alone. Please advise of your own thoughts with respect to the necessity of oral argument.
The second matter the Arbitrator referred to was the issues. After setting out what he thought they were, he invited counsel to provide their views about the statement of the issues. He concluded the letter by stating “Upon receipt and consideration of your reply correspondence, I will establish appropriate timelines for submissions” and asking for responses within seven business days.
On September 30, 2016, Mr. Wilson wrote the Arbitrator. He took objection to the Arbitrator raising insurer defences before the insurer even got around to them. He went on to ask if the insurer wished to have the preliminary issues determined prior to a hearing on the merits, and requested an insurer’s affidavit, to which Mrs. Vaitheeswaran might respond by affidavit.
On October 18, 2016, Ms. Joanna Cox wrote to the Arbitrator. However, instead of responding to his request for her thoughts with respect to the necessity of oral argument, as opposed to proceeding on the basis of affidavit evidence and written submissions alone, she submitted that all issues in dispute had already been disposed of. She wrote that, based on two letters from Mr. Wilson sent prior to the scheduled 2011 hearing, he had limited the claim for housekeeping benefits to the period of June 3, 2008 to October 19, 2009. Therefore, she wrote, no preliminary issue hearing was necessary, as it “would be inconsistent with the Insurer’s position that all matters in dispute in the proceeding were finally disposed of.”
On November 16, 2016, Mr. Wilson wrote to the Arbitrator asking what steps the Commission was taking and noting that Ms. Cox’s letter had been misplaced at his office.
On November 29, 2016, the Arbitrator wrote to the parties and included a copy of Ms. Cox’s letter for Mr. Wilson’s benefit. However, he then went on to find that, based on her letter and the enclosed correspondence – the two earlier letters from Mr. Wilson – the Commission was functus. He noted that the two letters showed that Mr. Wilson “unequivocally admitted that the issues in the hearing were limited” to the period from June 2, 2008 to October 19, 2009 regarding the housekeeping claim. Accordingly, he wrote:
The Minutes of Settlement entered into between the parties, and filed with the Commission, were therefore fully dispositive of everything in issue between the parties at the arbitration. There were no residual or undecided issues as suggested by Mr. Wilson in his letter of August 24, 2016. The dismissal order [sic] of Arbitrator Richards dated October 14th, 2011 in this matter represented a full and final disposition of all matters that were raised or could have been raised in the application.2
III. ANALYSIS
Mrs. Vaitheeswaran submits that the Arbitrator erred because he failed to follow the provisions of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, the rules of the Dispute Resolution Practice Code, and the principles of natural justice.
I agree. As can be seen from the above, Arbitrator Robinson set out a procedure to be followed. He determined that there would be a preliminary issue hearing. He first asked for submissions on whether the parties required an oral hearing and whether he had properly framed the issues. However, instead of following those procedures, he then simply dismissed the proceeding without any notice to or input from Mrs. Vaitheeswaran after receipt of Ms. Cox’s letter. He did not even allow Mr. Wilson to respond to that letter, since he only sent a copy of it along with his decision. The hearing, such as it was, therefore proceeded entirely without the participation of Mrs. Vaitheeswaran.
As set out in sections 6 and 7 of the SPPA, it is only in limited circumstances that a tribunal may proceed without the participation of a party, namely where a notice of hearing has been served and the party does not attend the oral hearing or participate in the written or electronic hearing. Rule 37.9 of the DRPC is to the same effect. Obviously, no notice of any kind was served here. As for natural justice, Mrs. Vaitheeswaran was deprived of her right to be heard.
State Farm submits that s. 4.6 of the SPPA allows a tribunal to dismiss a proceeding without a hearing where it is, say, frivolous, vexatious or commenced in bad faith. However, even in that case, before dismissing a proceeding, the tribunal has to give notice to the party of its intention to dismiss, set out the reasons for the proposed dismissal, and allow the affected party to make submissions within the time specified in the notice: see subsections 4.6 (2), (3) and (4). Further, s. 4.6 (5) provides: “A tribunal shall not dismiss a proceeding under this section until it has given notice under subsection (2) and considered any submissions made under subsection (4).” Finally, s. 4.6 (6) requires a tribunal to have made rules pursuant to the preceding before dismissing under s. 4.6. Rule 68 of the DRPC therefore sets out the relevant provisions, including giving an affected person 20 days to provide grounds for objecting to the dismissal.
None of the provisions of the SPPA or the DRPC were followed by the Arbitrator. Mrs. Vaitheeswaran never received any notice of an intention to dismiss without a hearing, and she never had the occasion to provide grounds for objecting to the dismissal. It follows that the Arbitrator never considered any objections or submissions received, as required by Rule 68.4.
This was an error of law. The appeal is therefore allowed. The matter is returned to arbitration for any relevant determinations based on Mrs. Vaitheeswaran’s request in counsel’s letter of August 24, 2016.
IV. EXPENSES
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.
August 23, 2018
David Evans
Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- The order was not a dismissal order as it included a provision for ongoing income replacement benefits.