A.L. v. The Guarantee Company of North America, 2020 CanLII 57417

Citation: A.L. v. The Guarantee Company of North America, 2020 CanLII 57417

Released Date: 07/30/2020

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.

Between:

A.L. Applicant

And

The Guarantee Company of North America Respondent

PRELIMINARY ISSUE DECISION AND ORDER

ADJUDICATOR: Sandeep Johal

APPEARANCES: Counsel for the Applicant: Kevan Wylie Counsel for the Respondent: Kerry L. Figliomeni

Heard: By way of written submissions

OVERVIEW

1The applicant was injured in an automobile accident on August 15, 2011 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant applied for benefits that were denied by the respondent on the basis that the medical benefits were not reasonable and necessary. The applicant disagreed with that decision and submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”).

3The respondent raised a preliminary issue that the applicant’s claim for the Non-Earner Benefit (“NEB”), orthopaedic treatment and a physiatry assessment were statute-barred as they were disputed outside the two-year limitation period as per s. 56 of the Schedule.

ISSUES TO BE DECIDED

4The following are the issues to be decided:

i. Is the applicant prevented from applying to the tribunal for a Non-Earner Benefit (NEB) because her claim is outside the two-year limitation period?

j. Is the applicant prevented from applying for a medical benefit in the amount of $2,881.50 for orthopaedic treatment recommended by Meditecs Independent Medical Examinations submitted in a treatment plan December 1, 2016 and denied by the respondent December 16, 2016, because her claim is outside the two-year limitation period?

k. Is the applicant prevented from applying for a cost of examination in the amount of $2,486.00 for a physiatry assessment recommended by Meditecs Independent Medical Examinations submitted in a treatment plan February 6, 2017 and denied by the respondent February 21, 2017, because her claim is outside the two-year limitation period?

l. Is the respondent entitled to costs?

5In her written submissions the applicant withdrew the preliminary issues in dispute which form the basis for this written hearing. As a result, only the respondent’s request for costs will be addressed.

RESULT

6The respondent is not entitled to costs.

ANALYSIS

7The Tribunal’s authority to award costs comes from two sources: Section 17.1 of the Statutory Powers and Procedure Act (“SPPA”); and Rule 19.1 of the Rules.²

8Section 17.1(1) of the SPPA empowers the Tribunal to order a party to pay another party’s costs in a proceeding according to rules made under s. 17.1(4). Section 17.1(2) states the Tribunal shall not order a party to pay costs unless the conduct or course of conduct of that party has been unreasonable, frivolous or vexatious, or has acted in bad faith.

9Rule 19.1 of the Rules mirrors the language of s. 17.1(2) of the SPPA, and provides that a party may make a request to the Tribunal for its costs where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously or in bad faith.

10Rule 19.5 sets out the powers of the Tribunal in deciding whether to order costs and the amount of costs. The Tribunal shall consider all relevant factors including:

a) The seriousness of the misconduct;

b) Whether the conduct was in breach of a direction or order issued by the Tribunal;

c) Whether or not a party’s behaviour interfered with the Tribunal’s ability to carry out a fair, efficient and effective process;

d) Prejudice to other parties; and,

e) The potential impact an order for costs would have on individuals accessing the Tribunal system.

11The respondent’s position is that the current application at the Tribunal is unreasonable, frivolous, vexatious and done in bad faith, because the NEB issue was previously litigated and dealt with in its entirety and finality through the previous dispute resolution process under the Financial Services Commission of Ontario (“FSCO”). According to the respondent, the parties reached a resolution on the NEB three times throughout the life of the matter at FSCO and attempting to apply for the same benefit at the Tribunal now is unreasonable, frivolous, vexatious and done in bad faith. According to the respondent, bringing the NEB issue at the Tribunal was done to circumvent the FSCO process and is a duplication of proceedings which is not permitted in law.

12Furthermore, the respondent submits the applicant waited until the 11th hour (in her written submissions) to withdraw the issues and did so in a way that prejudiced the respondent. According to the respondent, this is not a fair, efficient or an effective use of the Tribunal process. Furthermore, the decision to maintain the NEB issue knowing the previous history of the issue was unreasonable, frivolous, vexatious and done in bad faith and the time and expense of this preliminary issue hearing could have been avoided if the applicant turned her mind to these issues at any time after receipt of the respondent’s position as laid out during the case conference itself.

13As a result, the respondent seeks its costs in preparing its materials for this written preliminary issue hearing in the amount of $1,000 plus HST pursuant to Rule 19.6.

14The applicant’s position is that the respondent secured a cost award from the FSCO proceedings and a further cost order would impact the applicant’s ability to access the Tribunal system. Furthermore, the applicant submits that Rule 19.1 provides that “Where a party believes another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith, that party may make request to the Tribunal for costs.” (emphasis in original). Rule 2.1 defines “proceeding” as “the entire Tribunal process from the start of an appeal to the time a matter is finally resolved.”

15According to the applicant, her conduct does not rise to the level of warranting costs as the Tribunal application is still ongoing and a determination on the merits has not been made with respect to the substantive issues. Therefore the “proceeding” has not concluded and costs should not be awarded at his early preliminary stage. The applicant’s position is that costs should follow the cause and be determined once the substantive issues currently in dispute are decided. As a result, the applicant takes the position that the respondent’s request for costs is premature and unwarranted, as the “proceeding” according to Rule 2.17 has not yet concluded.

16This is a request for costs by the respondent and therefore the onus is on the respondent to prove on a balance of probabilities.

Was the non-earner benefit application at the Tribunal a duplication of proceedings?

17Upon a review of the evidence, I find that the parties did not settle the NEB matter at FSCO; the matter was withdrawn prior to the hearing and the respondent was successful on the issue of costs. However, there was no adjudication on the issue of the NEB on its merits. There was a settlement offer by the respondent which was ultimately not agreed to by the applicant and the settlement was revoked.

18The applicant chose to exercise her legal right to not sign the settlement agreement within the “cooling off” period of two days and as a result, there was no hearing on the merits for an NEB at FSCO. Therefore, the Tribunal application is not a duplicate proceeding and the doctrine of res judicata does not apply.

Withdrawal of the Tribunal Application

19The respondent takes the position that the applicant was statute-barred as the denial of the NEB and the treatment plans were more than two years ago before the applicant decided to bring a Tribunal application. According to the respondent, the applicant knew that her NEB claim was statute-barred and still chose to dispute it at the Tribunal. Furthermore, the applicant unilaterally withdrew the application just days prior to the hearing. As a result, the respondent should be entitled to costs.

20In my view, an applicant is entitled to withdraw an issue in dispute or an entire application and the consent of the other party is not required in order to do so. Rarely, absent some other evidence of a course of conduct that can be considered unreasonable, frivolous, vexatious or bad faith, will a withdrawal of an application be considered behaviour that warrants a cost award. Furthermore, once an issue in dispute is withdrawn, it is withdrawn on a without prejudice basis. Absent a legally binding settlement agreement on the issue, or a decision after a hearing on the merits, the Tribunal does not have jurisdiction to prevent the applicant from disputing the denial of that benefit.

Is the respondent entitled to costs?

21An order for costs under the facts of this case - where the parties have not had a hearing on the merits of the NEB or whether it was past the two-year limitation period to be disputed in accordance with s. 56 of the Schedule, and where there was no legally valid settlement agreement executed by both parties - would have a negative impact on individuals accessing the Tribunal system.

22Under the fact scenario of this case, I am not persuaded this can be considered serious misconduct warranting costs. The applicant was not in breach of any direction or order by the Tribunal, and I do not find the withdrawing of issues before a hearing to be considered behaviour that interfered with the Tribunal’s ability to carry out a fair, efficient and effective process. Although the respondent may have suffered some prejudice by having to expend time to provide its written submissions, it also made a request for costs which means the respondent still would have had to expend time preparing written submissions for this preliminary issue hearing.

23The respondent submits that the inclusion of the NEB in the Tribunal application was frivolous, vexatious and done in bad faith. It put the respondent to great expense to prepare its materials and the applicant had plenty of time to address the preliminary issues to narrow the issues in dispute. If she had done so, the length of the hearing could have been shortened and the delay could have been avoided had the applicant turned her mind to these issues at any time after receipt of the respondent’s position during the case conference. In support of its position, the respondent relies upon the Tribunal case of S.W. and Aviva Insurance Company of Canada.³

24In S.W. the respondent maintained that the issue of entitlement to an IRB was not in dispute in its opening submissions at the in-person hearing, however, in correspondence it denied the IRB because it maintained the applicant was not entitled to the benefit as she did not meet the disability test. As a result, the applicant was put through great expense in terms of preparing for the hearing and having her doctor witnesses available to give evidence. Vice-Chair Flude found that the insurer’s position was disingenuous and its actions were unreasonable and vexatious by taking the position that entitlement was never in dispute, despite evidence to the contrary. Vice-Chair Flude found that the respondent embarked on a course of behaviour that had the effect of representing to the applicant and the Tribunal that entitlement was in dispute.⁴ As a result, an order for costs was granted and made against the respondent.

25I do not find the facts in S.W. to be similar to the facts in the present case and as a result, I do not find the S.W. case to be of assistance to the respondent. There was no hearing on the merits of the applicant’s NEB claim that was heard at FSCO or at the Tribunal and this is not a situation where one party conceded entitlement on the day of the hearing and put the other party at an expense of having its doctor witnesses ready to testify when they were not required.

26As a result of the above and on the basis that the issue of the NEB and the treatment plans have not been heard on its merits and the parties have not entered into a legally valid settlement agreement, I find that the applicant’s conduct does not pass the threshold of behaviour that could be considered unreasonable, frivolous, vexatious or in bad faith. The respondent’s request for costs is dismissed.

ORDER

27The respondent is not entitled to costs. Either party may contact the Tribunal to schedule a case conference in order to discuss the substantive issues in dispute.

Footnotes

1. 1O. Reg. 34/10.
2. 2Common Rules of Practice and Procedure (“the Rules”).
3. 317-005302 v Aviva Insurance Company of Canada, 2018 CanLII 83535 (ON LAT) (“S.W.”).
4. 4S.W. at para. 40.