Dispute Resolution Services

Services de règlement des différends

Neutral Citation: 2020 ONFSCDRS 15

A09-002295

BETWEEN:

SRISELVARANY VAITHEESWARAN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

Before: Alan Mervin

Decision by: Edward Lee, by written submissions

Appearances: Robert Plate for Mrs. Vaitheeswaran

Jonathan Schrieder for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Sriselvarany Vaitheeswaran, was injured in a motor vehicle accident on October 19, 2007. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ Disputes arose which the parties were unable to resolve through mediation, and Mrs. Vaitheeswaran applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Does the Commission [now Dispute Resolution Services or “DRS”] have jurisdiction to adjudicate the Applicant’s claim for housekeeping and home maintenance benefits from October 19, 2009 and ongoing, or is the Commission [or Dispute Resolution Services] functus officio?
If the Commission [Dispute resolution Services or “DRS”] is not functus officio, should the issues sought to be added by the Insured in the Insured’s letter of September 12, 2018 be added to the FSCO proceeding?

Result:

The Commission [or Dispute Resolution Services] is functus officio, and has no jurisdiction to adjudicate the Applicant’s claim for housekeeping and home maintenance benefits from October 19, 2009 and ongoing.
Given my response to issue one, it is not necessary for me to consider issue two.

THE NATURE OF THE DISPUTE:

The relevant history of this matter is as follows:

Ms. Vaitheeswaran’s automobile accident of October 19, 2007, led her to claim accident benefits from State Farm Mutual Insurance Company (“State Farm”).

Disputes between the parties concerning those accident benefits led to the scheduling of an arbitration hearing. As the hearing was to commence on July 11, 2011, the parties reached an agreement of the matter. They signed Minutes of Settlement, and requested that Arbitrator Richards incorporate them into a consent order he later issued on October 14, 2011.

Nothing further was heard in this matter until August 24, 2016, when the Applicant (through her counsel), sent a letter to the Commission stating that although the agreement of July 11, 2011 comprised a settlement of the housekeeping claim for the period from June 3, 2008 to October 19, 2009, this limitation of the claim had been made in “error,” as the Application for Arbitration specifically stated that the housekeeping and home maintenance benefit had been claimed “for the period commencing June 2, 2008 to ongoing.”

The Applicant now claims she is catastrophically impaired and has obtained assessments for this determination. She also seeks to pursue further housekeeping and home maintenance benefits beyond the two-year limit for which a non-catastrophically impaired claimant is entitled.

State Farm’s position is that following the settlement of issues before Arbitrator Richards in July 2011, FSCO or DRS is functus officio and has no jurisdiction to deal with the claims the Applicant now seeks to pursue.

Arbitrator Robinson originally heard this matter and held that he and FSCO were functus officio and had no jurisdiction to hear the further claim for housekeeping and home maintenance and the issue of catastrophic impairment.²

Ms. Vaitheeswaran then appealed the decision of Arbitrator Robinson. In his decision of August 23, 2018, Delegate Evans determined Arbitrator Robinson had committed an error of natural justice in his decision, and remitted the question to another arbitrator.

The hearing was then conducted before Arbitrator Alan Mervin who set up the preliminary question and delineated the parameters of the dispute. He decided the matter would be heard through written submissions and set out the timelines for the submissions of all written arguments and supporting documentation.

All arguments and supporting documentation were then received by Arbitrator Mervin, but he died before he could issue his decision. This matter was then referred back to the Director of Arbitrations who contacted counsel and informed them of various options that might be used in this situation.

This matter was then assigned to me in the fall of 2019 by the Director on the basis that I would make a determination based solely on the issues set out by Arbitrator Mervin and the written submissions and documentation provided to him through the course of the proceeding he conducted.

Later, I directed the parties to provide written submissions and supporting documentation in regard to the expenses of this proceeding.

EVIDENCE AND ANALYSIS:

Does the Commission [now Dispute Resolution Services] have jurisdiction to adjudicate the Applicant’s claim for housekeeping and home maintenance benefits from October 19, 2009 and ongoing, or is the Commission [or Dispute Resolution Services] functus officio?

The Applicant argues that DRS is not functus officio for the following reasons:

(a) There was no final order disposing of the arbitration proceeding

First, the applicant submits there was never a final order disposing of the arbitration proceeding and the arbitration proceeding was never dismissed. Accordingly, Rule 4.1 of the Dispute Resolution Practice Code (the “DRPC”) could now allow an arbitrator to reopen this case. That provision reads as follows:

43.1 The Arbitrator may re-open a hearing at any time before he or she makes a final order disposing of the arbitration.

I reject this argument. Instead, I find Arbitrator Richards issued a final order in this matter on October 14, 2011, wherein he determined all the issues in dispute at the arbitration.

That final order incorporated the Minutes of Settlement agreed by the parties and included the following statement:

The insurer shall pay to the insured the amount of $7,200.00 with respect to the insured’s house keeping claim for the period June 3, 2008 to October 19, 2009 in satisfaction of all claims for the said period.

The Arbitrator’s jurisdiction was completely expended by the issuance of this order. This is also demonstrated by the extensive record pertaining to the pre-hearing conference, resumptions, and letters from the pre-hearing arbitrator and Mr. Wilson (the Applicant’s counsel) himself.

Those written communications include the pre-hearing arbitrator’s letter of December 23, 2009, which set out the following issue in dispute for the arbitration:

Is Mrs. Vaitheeswaran entitled to payments for housekeeping and home maintenance services, pursuant to section 22 of the Schedule in the amount of $100 per week from June 3, 2008 to October 19, 2009? [underlining mine]

The same pre-hearing arbitrator wrote another letter to the parties dated May 18, 2011:

I am writing further to Mr. Wilson’s letter dated May 16, 2011, which was given to me today. Mr. Wilson requests that the following issues be dealt with at the arbitration hearing scheduled to commence in July 2011:

Issues at the Arbitration hearing:

The issues in dispute were identified by Mr. Wilson as follows:

Is Mr. Vaitheeswaran entitled to Payments for Housekeeping and home manitence services, pursuant to section 22 of the Schedule in the amount of $100 per week from June 3, 2008 to October 19, 2009?

Mr. Wilson then responded to the pre-hearing arbitrator on May 30, 2011, re-confirming the same time period for the housekeeping and home maintenance benefit.

I acknowledge receipt of your correspondence dated May 18, 2011. Counsel for the insurer and I have agreed that all issues referenced in your correspondence dated May 18, 2011, are to be added to the issues in dispute at the upcoming arbitration proceeding. [underlining mine]

The pre-hearing arbitrator then issued yet another letter dated May 31, 2011:

As outlined in Mr. Wilson’s letter of May 30, 2011, on consent of the parties, the following issues be (sic) dealt with at the arbitration hearing scheduled to commence in July 2011:

The issues in dispute were identified by Mr. Wilson as follows:

Is Mrs. Vaitheeswaran entitled to Payments for Housekeeping and home manitence services, pursuant to section 22 of the Schedule in the amount of $100 per week from June 3, 2008 to October 19, 2009? [underlining mine]

The inescapable conclusion from these communications is that the parties agreed to limit the Applicant’s housekeeping claim to the period of June 3, 2008 to October 19, 2009.

Black’s Law Dictionary defines functus officio as follows:

Functus Officio: A task performed. Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority. Applied to an officer whose term has expired and who has consequently no further official authority; and also to an instrument, power, agency, etc., which has fulfilled the purpose of its creation, and is therefore of no further virtue or effect.

When Arbitrator Richards incorporated the Minutes of Settlement into his order, he expended the totality of the jurisdiction conferred upon him. Arbitrator Richards performed his task, discharged his office, and accomplished his purpose. There was nothing further for Arbitrator Richards to do, and he and the Commission (or the current DRS) are functus officio, and possess no residual jurisdiction in regard to the housekeeping issue.

(b) The wording of the pre-hearing letter and the subsequent correspondence of both counsel do not constitute a withdrawal of part of a dispute as referenced in Rule 70 of the DRPC

The Applicant argues that had the issue of post-104 week housekeeping benefits been withdrawn, it “would have been clearly referenced as a withdrawal in the pre-hearing letter.”³

I do not accept this argument. Rule 70 is only one process by which a party may withdraw all or part of a dispute. Rule 33 allows an arbitrator to identify and obtain agreement as to issues for arbitration.

33.1 One or more pre-hearing discussions may be held before an arbitrator who will attempt to resolve the dispute, and will assist the parties to prepare for arbitration by:

(a) identifying and obtaining agreement as to the issues for arbitration;

In the instant case, the parties did just this: they identified and agreed on the issues for the arbitration. The numerous pre-hearing communications (set out above) confirmed that the housekeeping and home maintenance claim was to be limited to June 3, 2008 to October 2009. The Minutes of Settlement, prepared by the parties, re-confirmed this same limitation.

Nothing in the extensive communications between the parties and the pre-hearing arbitrator or in the Minutes of Settlement suggests that either party wished to reserve any issue in dispute for a later date.

Nor am I swayed by the Applicant’s argument that some form of waiver of Rule 70, as permitted by Rule 81.1(b), is required because of the “harsh and unreasonable result for the applicant”⁴ should she not be permitted to proceed with her claim for post-104 week housekeeping benefits. Nothing in the Schedule suggests I should waive some rule to rescind a settlement some five years after the fact, merely because one party now believes the settlement leads to a “harsh and unreasonable” result.

(c) The consumer protection aspect of the legislation prevents the Applicant’s claim for post-104 week housekeeping benefits from being precluded

The applicant argues the consumer protection aspect of the legislation, as set out in Smith and Co-operators,⁵ places the onus on the insurer to persuade the Commission that the conduct of the insured resulted in an abandonment of her post 104-week claim. She argues that where the insurer was aware, “through its counsel of the intention of the insured with respect to her potential right to claim post-104 week housekeeping benefits, it would be entirely contrary to the consumer protection aspect of the legislation for the insured’s future claim to be precluded.”⁶

The Smith and Co-operators case dealt with the issue of a clear and unequivocal denial in the context of an “Explanation of Benefits” form provided to an insured. It did not make reference to an agreement between counsel wherein an applicant limited the extent of her claim to an accident benefit.

In Somerville and State Farm Mutual Automobile Insurance Company, Arbitrator Rogers considered the effect of Smith and Co-operators and the consumer protection objective. He held as follows:

The consumer protection objective dictates an approach to interpreting the Schedule. Where ambiguity exists, a broad and liberal interpretation of the Schedule in favour of the insured person is required. The consumer protection objective does not create rights not found in the Schedule.⁷ [underlining mine]

In the instant case, I find no ambiguity in the agreement reached between the parties. That agreement set out the time period of the housekeeping claim. No interpretation of the Schedule is required. Further, I agree with Arbitrator Rogers’ comments that the consumer protection objective does not create rights not found in the Schedule.

In addition, much of the Applicant’s argument about the suggested ambiguity in the limiting of her claim is related to the conduct of her own counsel during the negotiations that led to the settlement in 2011. In his affidavit, Mr. Wilson states “… out of an abundance of caution, the position of the insured that she was not abandoning her claim for post 104 week housekeeping benefits should have been placed on the record. The failure to make that assertion was the error, and not the restriction of the claim to a two year period.⁸” [underlining mine]

Mr. Wilson now agrees there was no error in limiting of the claim to the temporal period set out in the consent order of Arbitrator Richards. Nevertheless, the fact that Mr. Wilson also believes he should have added more to the agreement signed in 2011 does not in any way change or modify the omission made in 2011. Those Minutes of Settlement were incorporated into the consent order of Arbitrator Richards, and I do not have the authority to alter, modify, or otherwise vary that order.

In fact, it is also outside my purview to pronounce upon the legal considerations, stratagems, and tactical choices employed by Mr. Wilson or any other counsel in the conduct of an arbitration claim or in their settlement discussions outside the hearing room. It is not uncommon for counsel on both sides to withdraw, limit, or otherwise dispose of claims in consideration of other gains that may accrue as a result of a negotiated settlement. That is the very nature of the process.

The applicant states in her affidavit that she had no intention of abandoning her claim for housekeeping benefits for the period beyond October 19, 2009, and did not instruct her lawyers to do so.⁹ Nonetheless, those interactions between client and counsel in the conduct of a claim are also outside my purview. The Applicant was represented by legal counsel at all times during the arbitration process. At no time did she indicate she no longer wished to be represented by this counsel or that he did not have the ostensible authority to act as he did.

Further, there is little I need to address in Mr. Wilson’s affidavit concerning his understanding or belief of what was in the mind of State Farm’s counsel when the agreement was reached.

According to Mr. Wilson: “I do have a recollection of advising Mr. Franklin at the time, that the Minutes were being drawn by me in this manner, given the possibility as there would be in any case, that the insured might seek a catastrophic designation at a later date and the form of the Minutes would permit her to proceed to a claim for post housekeeping benefits on the event that were to occur. Mr. Franklin raised no objection to the form of the Minutes, and executed the same.”¹⁰ [underlining mine]

This paragraph in Mr. Wilson’s affidavit only confirms what is apparent from the order itself: the insurer agreed to limit the housekeeping claim as set out in the very words and form of the agreement. As already mentioned, no party now argues it was an error to limit the housekeeping claim as set out, but nothing in the agreement suggests the changes and alterations Mr. Wilson would now like to have “read into” it. Nothing in the agreement suggests any residual jurisdiction was left in the hands of the arbitrator.

Arbitrator Rogers set this argument to rest in Somerville¹¹ (a decision which also dealt with the issue of the housekeeping and home maintenance benefit) where he held as follows:

In my view, Mr. Somerville’s argument is resolved by the jurisprudence establishing that an insured person does not have the right to make multiple applications for weekly benefits. The leading case on the issue is Haldenby v. Dominion of Canada General Insurance Co. In that case, the plaintiff’s position was that she could make a new application for post-156 week income replacement benefits. The Court found no right to do so. It stated as follows in addressing this argument:

The problem with this submission is that there is no provision in the Act or the SABS which allows a claimant to reapply for further benefits after an insured person's benefits have been terminated by the insurer. The only remedy for the insured person is to appeal the termination of benefits within the two-year period.

In the instant case, the applicant faces a similar obstacle. She applied for the housekeeping benefit in her application for arbitration in 2009 and settled that claim in 2011. Despite Mr. Wilson’s argument to the contrary, to recommence the claim would effectively allow her two housekeeping claims: one for pre-104 weeks and another for post-104 weeks.

The Haldenby court ruled out the possibility of multiple application for weekly benefits, and I addressed a similar issue in my previous decision in Ramalingam and State Farm Mutual Automobile Insurance Company, which also dealt with housekeeping and home maintenance.

I am in agreement with the position taken by State Farm on this issue. To accept the position of Mr. Ramalingam would allow the housekeeping claim to be broken into two separate and distinct issues: one concerning the pre 104-week period and another for post 104 weeks. It would then be possible to break up the arbitration to hear the two issues. Mr. Ramalingam directed me to no jurisprudence or authority in the Schedule to support the proposition that the housekeeping claim is composed of two separate and distinct issues.¹²

My determination in Ramalingam applies to the present case. Ms. Vaitheeswaran cannot bring a second housekeeping claim in this matter.

Nor do I find the decision of Thevaranjan and Personal Insurance Company of Canada¹³ to be of help to the applicant. In Thevaranjan, one of the issues in dispute was whether the applicant was entitled to housekeeping benefits for a number of discrete periods, “ … and thereafter, from October 16, 2004 and ongoing, at $100.00 per week.” [underlining mine]

The arbitrator held as follows:

As noted earlier, the pre-hearing letter reflects that the Applicant technically claims ongoing housekeeping and home maintenance benefits which, under the circumstances, would include a claim for post-104 week benefits. I received no evidence or submissions from either party in relation to subsection 22(3) of the Schedule on the issue of the Applicant’s entitlement to those benefits. Because I did not adjudicate the merits of that issue, I also dismiss that claim on a technical basis without prejudice to the Applicant’s right to bring a further Application for post-104 week housekeeping and home maintenance benefits.¹⁴ [underlining mine]

Without any insight into the arbitrator’s thought process, it is noteworthy that she received neither evidence nor submissions on the issue of entitlement to post-104 week housekeeping benefits. Without the aid of counsel on this point, she might very well have been unaware of the ruling in Haldenby, which as noted, precludes the bringing of multiple applications for the same weekly benefit.

Further and more importantly, ongoing housekeeping benefits (post 104 weeks) were an issue before the Arbitrator in the Thevaranjan case, because “… the pre-hearing letter reflect[ed] that the applicant technically claims ongoing housekeeping and home maintenance benefits [underlining mine]…” When the hearing commenced, that was an issue in dispute.

This distinguishes Thevaranjan from the instant case where the housekeeping benefit, as already determined, was limited to a defined period during the pre-hearing process. Arbitrator Richards incorporated the Minutes of Settlement into his order, and no jurisdiction remains to consider anything else.

Finally, I am not convinced that the lack of a consent dismissal order from the tribunal somehow allows the applicant to rescind the settlement, as suggested by Mr. Wilson. Rule 69.4 of the DRPC does not make it mandatory for the parties to request an order dismissing the proceeding.

In fact, the parties made a written request that Arbitrator Richards issue his consent order of October 14, 2011. That consent order required the ongoing payment of an income replacement benefit.

In addition, Rules 69.2 and 69.3 read as follows:

69.2 If a dispute is settled, the Dispute Resolution Group will close its file:

(a) immediately upon receipt of written confirmation from the parties that the entire matter is settled; or

(b) 20 days following notice of the Dispute Resolution Group's intention to close the file on the basis of a reported settlement.

69.3 Where a party objects to the closure of a file under Rule 69.2(b), the party must promptly notify the Dispute Resolution Group and all other parties, in writing, setting out the reasons for the objection. [underlining mine]

Once Arbitrator Richards issued his consent order to the parties, he informed them of the following:

The file is now closed. Thank you for your cooperation in resolving this dispute.¹⁵

No objection was received from the parties until the applicant’s letter in August 2016, and I do not find that amounts to a prompt objection to the Commission’s closing of the file in 2011. In fact, nothing in the applicant’s conduct, up to the August 2016 letter, suggests to me that the applicant did not wish to limit the housekeeping claim as set out in the consent order of Arbitrator Richards.

For all of the above reasons, I find the Commission [or Dispute Resolution Services] is functus officio, and has no jurisdiction to adjudicate the Applicant’s claim for housekeeping and home maintenance benefits from October 19, 2009 and ongoing.

EXPENSES:

I directed the parties to provide written submissions and supporting documentation in regard to the expenses of this proceeding. I received submissions from the applicant and the insurer and reply submissions from the applicant.

I find the only criterion applicable in my determination of an award of expenses in this proceeding is section 12(2)(1) of Section F—the Expense Regulation¹⁶ which reads as follows:

12(2)(1): Each party’s degree of success in the outcome of the proceeding.

State Farm was completely successful in this proceeding, and I award State Farm its reasonable expenses incurred.

The applicant argued I should award State Farm no expenses arising from the cross-examination of Mr. Wilson’s affidavit, as there was “… no reference at all to any cross-examination, nor the responses of counsel in said cross-examination which the insurer relied upon in its submissions…,” thereby suggesting that the cross examination “… was of no value with respect to the insurer’s defence of the claim.”¹⁷

I disagree with this argument. A party is entitled to question or cross-examine any evidence led by the other party in an arbitration proceeding. In the present case, the evidence led by the applicant consisted largely of a lengthy affidavit prepared by Mr. Wilson, which detailed his version of the events that led to the settlement of the matter in 2011. State Farm had every right to cross-examine this affidavit. The fact that the responses obtained in that cross-examination were not ultimately referenced in State Farm’s submissions do not necessarily render the expenses incurred unrecoverable.

The only provision in the Expense Regulation that might have been relevant would be s.12(2)(4):¹⁸

The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.

In the present case, Mr. Wilson’s affidavit consisted of an eighteen-page document, comprised of twenty-nine distinct paragraphs. Stare Farm claims 4.8 hours for attendance, preparation, and submission for the cross-examination of counsel, as well as $261.00 for the court reporter.

I find that the hours claimed for preparation, attendance, and submission resulting from the cross-examination of the affidavit were reasonable, given the extensive nature and importance of that document. Thus, the conduct of State Farm in undertaking the cross-examination did not amount to a prolongation, obstruction, or hindrance of the proceeding. Therefore, I find no reason to exclude this expense.

On the other hand, I find the disbursement sought for the court reporter for that cross-examination is not permissible under the relevant legislation.

Overall, it is accepted jurisprudence that a line-by-line analysis of a bill of costs for expenses is unnecessary, and a reasonable assessment of a party’s expenses should be undertaken by an arbitrator.

Based on the bill of costs provided, I find it reasonable to award State Farm $4,000.00 for legal fees, disbursements, and HST for this proceeding.

June 17, 2020

Edward Lee Arbitrator

Date