Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2018 ONFSCDRS 23
Appeal P16-00013
OFFICE OF THE DIRECTOR OF ARBITRATIONS
BUKET UNAYUK
Appellant
and
WAWANESA MUTUAL INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Stanley Razenberg for Ms. Buket Unayuk
Katherine E. Kolnhofer and Brenda Cuneo for Wawanesa Mutual Insurance Company
HEARING DATE:
May 29, 2017
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 order dated January 18, 2016 is allowed in its entirety. The matter is remitted to arbitration for a hearing.
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.
January 31, 2018
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Ms. Buket Unayuk appeals the order of Arbitrator Savage dated January 18, 2016, dismissing her claims under the SABS–2010.1
Ms. Unayuk sought an adjournment of the hearing to seek counsel. The Arbitrator dismissed her claims because she left the hearing room during oral argument about the adjournment, which he found was an abandonment of the claim.
However, in the circumstances, Ms. Unayuk was entitled to an adjournment, and the Arbitrator also ignored evidence that she had not abandoned her claim.
II. BACKGROUND
Ms. Buket Unayuk was injured in a motor vehicle accident on March 10, 2012. Her claim for various statutory accident benefits from Wawanesa came before the Arbitrator on November 30, 2015. He dismissed her claims. Over about two pages in his decision, he determined that Ms. Unayuk’s request for an adjournment to obtain counsel should be denied and that her claims should be dismissed because she effectively abandoned the hearing by leaving the hearing room and therefore Wawanesa’s “extensive evidentiary material which demonstrated that the Applicant had acted fraudulently and the application under the circumstances was without merit” was uncontradicted. Over the next page and a half, he determined that Wawanesa was entitled to its expenses of about $38,500, mainly due to the “large volume and quality of the work done by the Insurer” when it “engaged in extensive surveillance and conducted forensic investigation, and in addition assembled detailed, complex affidavit evidence” after being “faced with serious allegations that a material misrepresentation had occurred, notwithstanding the well papered medical file of the Applicant.”
The Arbitrator’s decision, however, elides important time lines, and does not refer to evidence that, even after she left the hearing room, Ms. Unayuk was still seeking to obtain counsel to represent her. Both parties provided affidavits to set out what happened both leading up to and at the hearing.
The Arbitrator noted that, at the outset of the hearing, he entered two exhibits from Wawanesa, the first being photographs and texts juxtaposing Ms. Unayuk’s activities against her medical evidence, and the second being an affidavit of Bahar Ormangoren, identifying Ms. Unayuk in the photographs. The Arbitrator wrote:
The Applicant requested an adjournment in order to retain new counsel. Her previous counsel, Bogoroch and Associates, had been removed as counsel of record by Arbitrator Charles Matheson on November 17, 2015, upon that counsel’s application, and with the consent of the Insurer.
I note that the photographs and other material were amassed over a period of months prior to the hearing. The affidavit of Bahar Ormangoren was sworn on October 1, 2015. The affidavit and its exhibits were served on Bogoroch on October 23, 2015. Rule 40.1 of the DRPC2 provides that surveillance material must be served “at least 30 days before the hearing.” Since the hearing was to start on November 30, 2015, 30 days prior to that was October 31, 2015, but that was a Saturday, so the latest date for service was October 30, 2015. Service of the extensive surveillance material was thus effected just 7 days before the ultimate deadline.
Bogoroch wrote on October 28, 2015 to Ms. Unayuk advising of their intention to remove themselves as lawyers of record, and Ali Unayuk, her father, acknowledged getting it on November 2, 2015. Since on appeal, Wawanesa submits that Ms. Unayuk failed to seek replacement counsel in a timely manner and failed to prepare her response, I note that, pursuant to Rules 39 and 41, evidence and names of witnesses that will be relied on at the hearing must also be exchanged at least 30 days before the hearing. Neither Ms. Unayuk nor any new counsel retained by her could have possibly taken those steps by October 30, 2015.
On November 9, 2015, Bogoroch served Ms. Unayuk and her father with their motion to be removed from the record, to be heard at a pre-hearing on November 17, 2015, 13 days before the hearing. The motion sought two orders: one removing Bogoroch as counsel of record, and the other adjourning the hearing. Ms. Unayuk did not attend the pre-hearing. The pre-hearing arbitrator only listened to the first motion, as he “was satisfied that counsel had met their burden of proof on the client-solicitor breakdown, and as such asking for an adjournment would not be appropriate at this time.” I note that, pursuant to R. 9.8, where a party represented does not consent to a representative’s request for withdrawal, “an adjudicator may permit the representative to withdraw, subject to such terms as the adjudicator considers just.” The only terms the Arbitrator set were for Ms. Unayuk, who was told that she was now considered self-represented and had to communicate with ADR Chambers regarding her intentions and had to appear at the hearing on pain of potentially having her claims dismissed.
On November 19, 2015, Ms. Unayuk’s father wrote requesting an adjournment to obtain new counsel, suggesting an adjournment to some time in the middle of May 2016. He was initially advised that more information was needed to consider an adjournment request, although dates in May 2016 were available. Wawanesa’s counsel opposed considering the adjournment, and on November 20, 2015, Mr. Unayuk was advised that the adjournment would not be considered until the commencement of the hearing.
I will now return to the Arbitration Order, wherein the Arbitrator noted that Wawanesa’s counsel objected to the adjournment, submitting that it had gone to great expense and had spent a very considerable amount of time in its investigation to show Ms. Unayuk had acted fraudulently, and had called many witnesses to testify on this point.
The Arbitrator described what happened next as follows:
During the process of my Hearing oral submissions on the adjournment request and also engaging the parties in questions, the Applicant’s father continually disrupted the proceedings, attempting to answer for the Applicant. After several unheeded cautions, I finally asked him to remove himself from the Hearing room because the disruption was too distracting of attempts to conduct a proper Hearing. He did so. However, after he left, he began to shout from outside the room, and bang on the door to the Hearing room in a loud manner.
The individuals inside the Hearing room expressed feeling unsafe by the father’s actions, which eventually resulted in the police being called to the premises. One of his utterances outside the Hearing room was addressed to the Applicant for the Applicant to leave. While I was still in the process of conducting the Hearing on this adjournment request, the Applicant announced that she was leaving. I cautioned her that she should remain since the Hearing was ongoing, and she was at risk that the Arbitration could be dismissed against her. She left nevertheless.
Under the heading Decision and Reasons, the Arbitrator wrote that there were several determinative reasons why he denied the adjournment request and dismissed the Arbitration orally, with reasons to follow. First, he noted, Ms. Unayuk effectively abandoned the hearing when she removed herself while it was ongoing and before he ruled on the adjournment. He found her “actions in unilaterally departing the Hearing manifestly demonstrated disrespect for the integrity of the tribunal.”
Second, the Insurer’s “extensive evidentiary material which demonstrated that the Applicant had acted fraudulently and the application under the circumstances was without merit” went uncontradicted because Ms. Unayuk left. Accordingly, he dismissed the application and awarded almost all of the costs claimed by Wawanesa, with the exclusion of the $390.00 fee for the Court Reporter, because that was an optional cost, and the $3,000.00 claim for the Insurer’s Assessment, because being subject to very strict limitations, that assessment is not a proper disbursement.
I will go into a bit more detail about the events around the time the Arbitrator dismissed the case orally, as shown in the transcript and affidavits and submissions. The Applicant left at 11:04 a.m. There was a short recess, and the hearing resumed at 11:12 a.m. At pp. 39-41 of the arbitration transcript, the Arbitrator noted his concerns about Ms. Unayuk’s credibility regarding her notice of the Bogoroch motion to remove themselves from the record. Ms. Kolnhofer then told the Arbitrator that at around 11:12 a.m. the former counsel, Ms. Silberman, emailed her to confirm that an affidavit of service was filed on November 12. After hearing that, the Arbitrator stated that this showed Ms. Unayuk did not come with clean hands, and had further abandoned the hearing and presented no evidence to support her claim. He noted that Wawanesa had opposed the request for an adjournment and had asked for a dismissal, and therefore he found that the application was dismissed. He then asked for submissions on expenses.
It should be noted that around 11:24 a.m., Wendy Sokoloff wrote to Ms. Kolnhofer asking for the AB file and for Ms. Kolnhofer to advise the Arbitrator that an adjournment needed to be granted. Ms. Sokoloff also asked how many days were set for the arbitration and what the issues in dispute were. This email is apparently not reflected in the transcript although, as we have seen, the Arbitrator was advised of the email from Ms. Silberman, the former counsel.
Then there was another short recess from 11:27 a.m. to 12:05 p.m. This was apparently when Adam Moras from Sokoloff Lawyers called the Arbitrator. This discussion was not mentioned by the Arbitrator in his decision. In his Affidavit sworn April 2, 2016, Adam Moras states that Arbitrator Savage advised him that he was not prepared to consider his comments as his office was not counsel of record. The Arbitrator then ended the conversation.
After the Arbitrator returned to the hearing room, timelines were set for Wawanesa to provide its expense submissions to the Arbitrator.
As noted above, the Arbitrator eventually awarded Wawanesa most of its expenses claim.
III. ANALYSIS
When I read the transcript, I have great sympathy for what the Arbitrator went through that morning of the hearing.
That being said, the problems could have been avoided if an adjournment had been granted at the pre-hearing in the first place. The pre-hearing arbitrator could have dealt with the adjournment request first and then let Bogoroch withdraw, or made the adjournment a condition of the withdrawal. He provided no reasons why dealing with the adjournment was inappropriate. But certainly by the time of the hearing, Ms. Unayuk had two good reasons for seeking an adjournment, namely she no longer had counsel when she had been represented throughout and she had received the allegedly devastating surveillance evidence just outside the minimum time period for its delivery.
While it is true that these are not grounds for an adjournment set out in Practice Note 9, the Note is not binding, nor does it affect an arbitrator’s decision-making duty, as Rule 3.2 provides:
Practice Notes are designed to guide users in the dispute resolution process at the Commission. However, they are not binding and do not affect the duty of the adjudicator to make decisions based on the circumstances and merits of each case.
This was made clear in Certas Direct Insurance Company v. Gonsalves, 2011 ONSC 3986. As the Divisional Court stated in that case, neither the Dispute Resolution Practice Code, nor Practice Note 9 can interfere with the overarching responsibility to ensure a fair hearing:
Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.
In that case, orthopedic opinions on the insured’s behalf were delivered to the insurer 31 days before the hearing, in the face of which the insurer would have had no practical ability to respond absent an adjournment:
It is not enough to say that the delivery of these reports was made within the permitted time frame (in this case one day before the last day the Code, clause 39.1 says is acceptable) when, as the arbitrator found, they provide new evidence supporting a new position. This is trial by ambush.
Wawanesa submits that unlike in Gonsalves, Ms. Unayuk had 38 days before the hearing, which was more than enough time for her to review and respond to the affidavit evidence, the contents of which should not have surprised her, as she lived the events and authored the messages set out in the affidavit.
However, that reasoning – you know what you did, and we just caught you doing it – could be applied to any surveillance evidence, yet the Commission has always guarded against trial by ambush, whether it’s a doctor’s report or surveillance. To that end, Arbitrators and Delegates at the Commission have often emphasized that Rule 40.1 states that the evidence must be delivered at least 30 days before a hearing. Accordingly, they frequently ordered production of surveillance at least 60 days before a hearing, and in appropriate cases even ordered it produced 60 days after the pre-hearing: Unifund Assurance Company and Dewing, (FSCO P13-00018, August 28, 2013). As was noted in Dewing, the premise of postponing document exchange like surveillance evidence as late as possible is inconsistent with ensuring a fair hearing, so early production exchange is a crucial prerequisite to a fair, expeditious and inexpensive hearing. Here, much of the evidence was collected months before the hearing, and the affidavit was sworn on October 1, 2015 but only delivered on October 23, 2015.
It is also unclear how Ms. Unayuk could have had time to review and respond to the evidence. At the earliest, until October 28, 2015, and more likely up to November 2, 2015, she thought she had counsel attend to that. And as noted earlier, after October 30, 2015, no further evidence could be served and produced to be introduced at the hearing absent extraordinary circumstances. So I do not agree that delivering these surveillance reports within the permitted time frame was enough, in the circumstances.
In fact, the very strength of the evidence presented in the affidavit was an argument for granting an adjournment, not for denying it. It emphasizes how difficult it would have been for Ms. Unayuk to respond to the position taken against her, given the 30-day time limit for productions and witnesses. And even if she had obtained other counsel, whether 32 or 28 days before the hearing, counsel would have been equally constrained by the time limit.
Wawanesa also submits that Ms. Unayuk had plenty of time to locate counsel even though counsel could have done little other than argue for an adjournment in the first place and certainly would not have been able to present a case. However, I note that it was not guaranteed that Bogoroch would be allowed to withdraw at such a late stage, even where the insured did not attend the motion. As was said in Balendra and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO A08-002455, February 23, 2012), where the insured also did not participate in a withdrawal motion:
The commentary to Rule 2.09 of The Rules of Professional Conduct states “the governing principle is that a lawyer should protect the client’s interests to the best of the lawyer’s ability and should not desert the client at a critical stage of a matter or at a time when a withdrawal would put the client in a position of disadvantage or peril.” This Tribunal must take a dim view of late or critical stage withdrawals that leave a claimant exposed or significantly disadvantaged... [A]llowing [the insured’s] counsel to withdraw at this time would in my view bring the administration of justice at this Tribunal into disrepute by permitting his lawyer to desert him at a critical juncture.3
It should also be remembered that Ms. Unayuk was seeking an adjournment precisely to obtain counsel. That is what her father, Ali Unayuk, wrote on November 19, 2015: “I request for an adjournment in order to find a new lawyer.” Yet on the day of the hearing, the Arbitrator directed questions to the steps she had already taken to get one, although it was less than two weeks since it was confirmed Bogoroch was off the record. Wawanesa submits on appeal that Ms. Unayuk’s failure to obtain a lawyer meant her adjournment should be denied. In other words, the argument runs, Ms. Unayuk sought an adjournment to get a lawyer, but because she didn’t have one, she shouldn’t get an adjournment.
Wawanesa submits that Ms. Unayuk’s lack of diligence in retaining counsel also supported the denial of an adjournment, relying on R. v. Hazout, 2005 CarswellOnt 3854. However, the circumstances were entirely different in that case. On January 10, 2002, by which point the accused brothers Marc and Lauren Hazout already had a history of seeking adjournments to retain counsel, the matter was adjourned to April 8, 2002 to set a trial date. The brothers did not have counsel on April 8, 2002, and over their objections a trial date was set for June 17, 2002. Marc retained a lawyer on June 14, 2002, but he was not available on the trial date of June 17, 2002 and the next available dates were in January 2003. An adjournment request was denied. The adjournment denial was upheld, even though the court thought it would have been preferable had the trial judge granted the adjournment. The court noted Marc’s history of seeking adjournments to retain counsel and the numerous opportunities he had been given to obtain counsel and a complete lack of diligence in finding counsel.
The differences with this case are stark. At the earliest, Ms. Unayuk might have been aware 32 days before the hearing that counsel would be seeking leave to withdraw, and the withdrawal was only confirmed 13 days before the hearing. This was her first adjournment request, and her first request to get one for the purposes of retaining counsel. Accordingly, I find Hazout provides no support for the Insurer’s position.
However, Hazout is of use on another point. Wawanesa submits that Mr. Adam Moras had no standing to act as a representative. However, what he was seeking was to be able to speak to an adjournment in order to be retained. The Arbitrator refused to listen to him because he was not retained. In this regard, I cite para. 20 of Hazout:
Counsel appeared on behalf of Laurent and indicated that he needed more time to be retained because Laurent had been denied legal aid and was not sure if he could afford counsel. The matter was adjourned to April 8, 2002, to set a date for trial. The adjournment was granted to allow Marc and Laurent to retain counsel.
That is, an adjournment was granted based on representations from counsel who had not yet been retained. The Arbitrator therefore erred in refusing to listen to Mr. Moras, even though he was not yet retained. Again, the adjournment request was to retain counsel, and Mr. Moras wanted to speak to the adjournment request because he needed time to be retained. This was entirely reasonable.
The Arbitrator also erred in another point. The very fact that Mr. Moras was speaking to him on behalf of Ms. Unayuk was evidence that Ms. Unayuk had not, in fact, abandoned her claim but was still seeking to pursue it by retaining counsel. In that regard, let us review the events of that morning. Ms. Unayuk left at 11:04 a.m. The hearing resumed at 11:12 a.m., and the Arbitrator held that the claim was dismissed and asked for expenses submissions. But at 11:24 a.m. Ms. Sokoloff emailed Wawanesa’s counsel, and 3 minutes later Mr. Moras from her office called. The hearing was still ongoing. Although Wawanesa submits it was too late by that point, in my view, a hearing is not over until it’s over. The Arbitrator had evidence that Ms. Unayuk was not abandoning her claim, even though he mistakenly refused to listen to Mr. Moras. Considering the close timing of all these events, I find the Arbitrator could have and should have taken notice of Mr. Moras’ intervention, both to speak to the adjournment and to the abandonment issues. I find nothing prevented him from revisiting the abandonment issue in these circumstances.
Finally, the fact that a party leaves a hearing does not necessarily mean there was an intention to abandon the case: Igbinosun v. Law Society of Upper Canada, 2008 CarswellOnt 4276. The fact that the Arbitrator interpreted Ms. Unayuk’s departure as disrespect for the tribunal likely tainted his subsequent actions.
In conclusion, the delivery of the surveillance evidence so late that Ms. Unayuk could not respond to it in any reasonable fashion prior to the hearing meant that an adjournment should have been granted at the pre-hearing virtually as of right, and certainly at the hearing itself. The fact that she had no counsel when she had been represented throughout and had had little time to obtain counsel was a second, even stronger ground to allow an adjournment. And the fact that she continued to seek counsel even after leaving the hearing room showed that she had not abandoned her case.
The appeal is therefore allowed in its entirety, and the matter is returned to arbitration for a hearing.
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.
January 31, 2018
David Evans Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule – Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- Dispute Resolution Practice Code (Fourth Edition — Updated January 2014)
- R. v. Cunningham, 2010 SCC 10 [2010] 1 S.C.R. [footnote in the original]