Court File and Parties

COURT FILE NO.: CV-18-609158 MOTION HEARD: 2019-12-06 SUBSEQUENT CORRESPONDENCE FILED: 2019-12-19 and 2020-03-03 REASONS RELEASED: 2020-03-16

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

KUHANSEA BALASUBRAMANIAM Respondent/Insured

• and-

RBC GENERAL INSURANCE COMPANY Moving Party/Insurer

BEFORE: MASTER M.P. McGRAW

COUNSEL: P. Quesnel E-mail: pamela.quesnel@aviva.com -for the Moving Party/Insurer, RBC General Insurance Company

D. Wilson E-mail: dswilson@davidswilsonlaw.com -for the Respondent/Insured, Kuhansea Balasubramaniam

REASONS RELEASED: March 16, 2020

Reasons For Endorsement

I. Introduction

[1] This is a motion by Royal Bank General Insurance Company (“RBC”) to set aside or stay two Writs of Seizure and Sale totaling $17,387.70 (the “Writs”) in favour of the Respondent/Insured Kuhansea Balasubramaniam (the “Insured”). The Writs arise from an Arbitration Order of the Financial Services Commission of Ontario (“FSCO”) dated April 13, 2010 (the “Arbitration Order”) providing income replacement benefits (“IRB”) for the Insured pursuant the Statutory Accident Benefits Schedule Ontario Regulation 34/10 under the Insurance Act (Ontario) (“SABS”).

[2] What began as a routine exchange over IRB payments and document requests has ballooned into a dispute over the jurisdiction of this Court and the License Appeal Tribunal (the “LAT”) with respect to the enforcement of the Arbitration Order and the Writs.

II. The Arbitration Order, the Writs and the Motion

[3] The Insured was involved in a motor vehicle accident on August 24, 2005. He applied to RBC, his accident benefits insurer, for IRB and other benefits. RBC and the Insured consented to the Arbitration Order of Arbitrator Kowalski providing the Insured with weekly IRB payments of $311.21.

[4] On November 16, 2010, Insured’s counsel advised RBC in writing that while the Insured had stopped receiving his IRB payments, he had been earning employment income which may have reduced his weekly benefit to nil. Counsel stated that he would provide particulars in the near future. On January 18, 2011, RBC requested documents regarding the Insured’s post-accident income pursuant to s. 33 of SABS, which states:

33. (1) An applicant shall, within 10 business days after receiving a request from the insurer, provide the insurer with the following:

34. Any information reasonably required to assist the insurer in determining the applicant’s entitlement to a benefit.

(6) The insurer is not liable to pay a benefit in respect of any period during which the insured person fails to comply with subsection (1) or (2).

[5] As a result of the Insured’s failure to provide the requested documentation, RBC advised Insured’s counsel on February 8, 2011 that his IRB payments were suspended. RBC wrote to Insured’s counsel on July 5, 2011 and July 29, 2011 again requesting particulars of his employment income. Nothing was provided. On August 30, 2011, RBC commenced an Application for Variation/Revocation of the Arbitration Order (the “First Application”) and the Insured filed a Response on November 15, 2011. It does not appear as if RBC took any further steps with respect to the First Application.

[6] On February 8, 2012, the Insured sent RBC a Notice of Reassessment advising that between July 5, 2010 and December 31, 2010 he had earned $26,195 in gross income ($11,467.23 in net income) from the operation of a business. RBC claims that it paid the Insured IRB of $19,607.23 from April 13, 2010 to June 30, 2011 while his entitlement was $6,105.80. Therefore, by letter dated April 4, 2012, RBC advised Insured’s counsel that he had been overpaid by $13,500.43 during this period and demanded repayment. RBC also advised that it was reducing the IRB payments to $248.97 per week until repayment was received. RBC states that it paid reduced IRB of $497.97 bi-weekly from April 16, 2010 to May 29, 2016 and $503.59 from May 30, 2016 to June 12, 2016 to collect the balance of the overpayment. Afterwards, his IRB payments were restored to $311.21 per week.

[7] On October 27, 2017, RBC wrote to Insured’s counsel to discuss settlement and request medical documents and tax returns for 2012-2016. On December 8, 2017, counsel confirmed by email that the Insured was employed. RBC requested a declaration of post-accident income to calculate his IRB payments going forward and assess any overpayment. RBC wrote Insured’s counsel again on February 1 and 28, 2018 to request the documents. No documentation was provided and on July 3, 2018, RBC suspended the Insured’s IRB payments effective June 25, 2018.

[8] Insured’s counsel subsequently exchanged correspondence with RBC taking the position that pursuant to s. 281 of the Insurance Act, RBC was not permitted to arbitrarily reduce or terminate the IRB payments provided by the Arbitration Order. On August 14, 2018, RBC advised Insured’s counsel that the IRB payments would be suspended until the Insured’s income documents were provided.

[9] On November 19, 2018, Insured’s counsel filed a certified copy of the Arbitration Order with the Superior Court of Justice pursuant to s. 19 of the Statutory Powers Procedure Act (Ontario) (the “SPPA”):

19. (1) A certified copy of a tribunal’s decision or order in a proceeding may be filed in the Superior Court of Justice by the tribunal or by a party and on filing shall be deemed to be an order of that court and is enforceable as such.

(2) A party who files an order under subsection (1) shall notify the tribunal within 10 days after the filing.

(3) On receiving a certified copy of a tribunal’s order for the payment of money, the sheriff shall enforce the order as if it were an execution issued by the Superior Court of Justice.

[10] Section 66.2 of FSCO’s Dispute Resolution Code also provides that a party may file a certified copy of any order in the Ontario Superior Court of Justice and the order can be enforced by the Court in the same manner as an order of the Court.

[11] The Registrar stamped, signed, sealed and placed the Arbitration Order in the court file. On December 27, 2018, at the request of Insured’s counsel, the Registrar issued a Writ of Seizure and Sale in the amount of $8,402.67 plus costs and interest for IRB arrears from June 25, 2018 to December 17, 2018 (the “First Writ”). On February 7 and 12, 2019, Insured’s counsel advised RBC of the First Writ and provided copies of the supporting court materials. Due to inadvertence, Insured’s counsel did not advise FSCO as required under s. 19(2) of the SPPA that the Arbitration Order had been filed until February 12, 2019.

[12] This motion first came before me on May 16, 2019. RBC did not file a Factum and the motion was adjourned to July 24, 2019. I stated the following in my Endorsement:

“….in light of the unique legal issues, and my view that given the amounts involved and the underlying issues related to IRB payments sought by the respondent and documents requested by RBC, it is reasonable, proportionate consistent with Rule 1.04(1) and the most efficient use of court resources and the parties’ resources to adjourn this motion to July 24, 2019 for 90 minutes before me and I shall remain seized of this matter.”

[13] I also scheduled a telephone case conference for June 24, 2019 and directed as follows:

“Prior to the case conference, counsel shall engage in further discussions with respect to a potential resolution of this motion including the payments sought by the Respondent, the documents sought by RBC, any additional payments which may be sought and the overriding issue of whether this motion is the proper procedure to address the disputed issues between the parties. The parties shall also file any additional documents necessary for the hearing of this motion, recognizing that as a result of the procedure giving rise to the Writ, there are no pleadings or application materials.”

[14] On June 20, 2019, the Registrar, at the request of Insured’s counsel, issued a second Writ of Seizure and Sale in the amount of $6,846.62 plus costs and interest (the “Second Writ”, together with the First Writ, the “Writs”). During the June 24 telephone case conference, no meaningful updates were available regarding settlement discussions and the documentation requested by RBC. Therefore, I directed the motion to proceed on July 24, 2019 on the condition that the Insured file a Supplementary Affidavit with respect to the existence and status of the documents requested by RBC and the parties were ordered to continue their discussions with respect to the payments, documents and the proper forum.

[15] When the parties re-attended on July 24, 2019, none of the disputed issues had been narrowed or resolved. In fact, more were raised. On July 22, 2019, RBC had filed an Application for Variation/Revocation/Repayment with the LAT to recover IRB payments in the amount of $20,800 (the “Second Application”, together with the First Application, the “Applications”). RBC’s counsel also advised that, in the alternative, it was now requesting an order to stay the Writs pending the LAT’s consideration of the Applications. The parties agreed that the LAT had exclusive jurisdiction to make determinations regarding the IRB payments. However, the Insured now took the position that a Master, and possibly a Judge, did not have jurisdiction to set aside the Writs. This jurisdiction issue had been raised previously, however, it was now squarely before the Court as a formal position and no written submissions had been filed. Accordingly, I suggested that counsel consider appearing before a Judge in Civil Practice Court or otherwise to speak to jurisdiction.

[16] Notwithstanding the expanding number of issues, the Insured requested that I dismiss RBC’s motion at that attendance. I declined to do so:

“Having considered the submissions of counsel and the current record be me, I decline the Insured’s request to dismiss this motion today. While it would appear that a Master has no jurisdiction to consider the quantum of the amount owed under the Writ or otherwise deal with the underlying amount, it may still be the case that a Master has the jurisdiction to set aside the Writ or stay its enforcement as RBC now seeks as alternative relief. Accordingly, given all the jurisdictional issues raised, in my view it is reasonable, appropriate, proportionate and consistent with Rule 1.04(1) to adjourn this motion sine die. This will permit the parties to have further discussions with a view to resolving this motion or at least the proper forum, and permit RBC to consider if they wish to bring this motion before a Judge.”

[17] With respect to the documentation requested by RBC, the Insured filed a Supplementary Affidavit from a legal assistant which stated: i.) the Insured has never applied for CPP Disability Benefits; ii.) CRA records indicate that the Insured filed tax returns for 2013-2016 but they had no knowledge if he filed a return for 2017 and were unable to contact him to confirm; and iii.) counsel has medical records for the Insured in storage up to 2014 but none after March 2015.

[18] RBC states that on August 6, 2019, FSCO (now called the Ontario Financial Services Regulatory Authority (“FSRA”)) advised that the First Application was closed as abandoned on April 5, 2018. In emails with RBC later in August 2019, FSRA further confirmed that the First Application was closed on its system and that it was not accepting variations after June 8, 2019. The Insured disputes that this could be the status of the First Application.

[19] RBC ultimately elected to proceed with its motion before me. At RBC’s request, a telephone case conference was held on October 8, 2019 during which the motion was scheduled for December 6, 2019 and a timetable was established for the parties to file Supplementary Factums to address jurisdiction and RBC’s alternative request for a stay.

[20] At the attendance on December 6, 2019, RBC requested another adjournment until after a LAT case conference regarding the Applications scheduled for December 11, 2019. The Insured opposed this request. As set out in my Endorsement dated December 6, 2019, given that it was a third attendance, and balancing all of the factors and circumstances, I heard submissions on the threshold issue of jurisdiction and reserved my decision. RBC’s counsel was directed to advise me in writing after the LAT case conference and further discussions with Insured’s counsel whether it was necessary for me to release a decision.

[21] On December 19, 2019, RBC’s counsel advised that the LAT case conference did not proceed on December 11, 2019 and was rescheduled for February 25, 2020. RBC’s counsel requested that I defer my decision on jurisdiction until after the case conference while Insured’s counsel requested that I release a decision. By email dated March 3, 2020, Insured’s counsel advised that the LAT case conference proceeded on February 25, 2020, the matter did not resolve and requested that I release my decision.

III. The Law and Analysis

[22] The only issue is whether a Master has jurisdiction to set aside the Writs or, alternatively, to stay the Writs pending the disposition of the Applications by the LAT.

[23] Counsel were unable to refer me to any cases dealing with the enforcement of Writs under s. 19 of the SPPA or the relevant jurisdictional issues.

[24] RBC’s underlying argument is that the IRB amounts in the Writs are incorrect. Therefore, the Writs should be set aside so that the quantum can be determined by the LAT. The parties agree that the LAT has exclusive jurisdiction over disputes related to SABS, including variation of the Arbitration Order and the Insured’s IRB payments. Sections 280 - 281 of the Insurance Act state:

280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule.

281 (1) After the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits to the insured person on the basis of an alleged change of circumstances, alleged new evidence or an alleged error except as provided under this section.

(2) The insurer may reduce benefits if,

(a) the insured person agrees;

(b) the insurer is authorized to do so as a result of a successful appeal of the Licence Appeal Tribunal’s decision; or

(c) the insurer is authorized to do so by the Licence Appeal Tribunal.

[25] RBC argues that Insured’s counsel did not file sufficient evidence under s. 6 of SABS or Rule 60.07 to establish the amount to which the Insured is entitled. RBC further submits that its suspension of IRB payments was appropriate under s. 33 of SABS given the Insured’s failure to provide the documentation requested. The Insured submits that RBC is not permitted to unilaterally reduce the amount of the IRB payments set out in the Arbitration Order.

[26] Rule 1.02 provides that, with some exceptions which are not applicable to this motion, the Rules of Civil Procedure apply to all civil proceedings in the Court of Appeal and the Superior Court of Justice. The parties agree that in the present case there is no “proceeding” which is defined in Rule 1.03(1) as an action or an application.

[27] The respective jurisdictions of a Judge, a Master and the Registrar on motions are set out at Rule 37.02:

37.02 (1) A judge has jurisdiction to hear any motion in a proceeding.

(2) A master has jurisdiction to hear any motion in a proceeding, and has all the jurisdiction of a judge in respect of a motion, except a motion,

(a) where the power to grant the relief sought is conferred expressly on a judge by a statute or rule;

(b) to set aside, vary or amend an order of a judge;

(c) to abridge or extend a time prescribed by an order that a master could not have made;

(d) for judgment on consent in favour of or against a party under disability;

(e) relating to the liberty of the subject;

(f) under section 4 or 5 of the Judicial Review Procedure Act; or

(g) in an appeal.

(3) The registrar shall make an order granting the relief sought on a motion for an order on consent, if,

(a) the consent of all parties (including the consent of any party to be added, deleted or substituted) is filed;

(b) the consent states that no party affected by the order is under disability; and

(c) the order sought is for,

(i) amendment of a pleading, notice of application or notice of motion,

(ii) addition, deletion or substitution of a party,

(iii) removal of a lawyer as lawyer of record;

(iv) setting aside the noting of a party in default,

(v) setting aside a default judgment,

(vi) discharge of a certificate of pending litigation,

(vii) security for costs in a specified amount,

(viii) re-attendance of a witness to answer questions on an examination,

(ix) fulfilment of undertakings given on an examination, or

(x) dismissal of a proceeding, with or without costs.

[28] RBC submits that when the Arbitration Order was filed with the Registrar, the Registrar granted an order of the court. RBC argues that I have the authority to set aside this order under Rule 37.14(1)(c):

37.14 (1) A party or other person who,

(a) is affected by an order obtained on motion without notice;

(b) fails to appear on a motion through accident, mistake or insufficient notice; or

(c) is affected by an order of a registrar,

may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.

(3) A motion under subrule (1) or any other rule to set aside, vary or amend an order of a registrar may be made to a judge or master, at a place determined in accordance with rule 37.03 (place of hearing of motions).

[29] Although not cited by RBC, the Registrar may also be required to note a defendant in default under Rule 19.01 or grant default Judgment under Rule 19.04 which may be set aside by a Judge or Master under Rules 19.03 or 19.08, as applicable, on such terms as are just.

[30] RBC submits that if the Arbitration Order is set aside, then the Writs arising from the Arbitration Order should also be set aside, citing Master Dash’s decision in GMAC Leaseco Corp. v. Perruzza, [2006] O.J. No. 3007 where this was the effect of setting aside a default judgment.

[31] For the reasons set out below, I have concluded that a Master does not have the jurisdiction to set aside the Writs in the present circumstances.

[32] Masters have no inherent jurisdiction and derive their powers from statutes (Ontario Council of Hospital Unions v. Ontario (Minister of Health), 2007 ONSC 2659, [2007] O.J. No. 411 (Div. Ct.) at para. 37). In the case of motions, a Master’s jurisdiction is found in Rule 37.02(2). Similarly, a Registrar’s jurisdiction to grant orders on motions is set out in Rule 37.02(3) and a Master’s jurisdiction to set aside, vary or amend an order of the Registrar is provided for in Rule 37.14(3).

[33] The Insured filed a certified copy of the Arbitration Order with the court office. Upon receiving the Arbitration Order, the Registrar stamped it, signed it, sealed it and placed it in the court file. Section 19(1) of the SPPA provides that upon the Registrar doing so, the Arbitration Order was deemed to be an order of this Court and is enforceable as such. This includes the sheriff’s obligation under s. 19(3) to enforce the Writs.

[34] In my view, by stamping, signing, sealing and placing the Arbitration Order in the court file, the Registrar was not exercising her authority to grant or make any of the orders set out in Rule 37.02(2). Rather, the Registrar was exercising an administrative function to document the filing of the Arbitration Order, which in turn triggered the deeming provision under s. 19(1) of the SPPA that the Arbitration Order was now an order of this Court. In doing so, the Registrar did not make or grant an order or create a new document. She accepted the existing Arbitration Order granted by FSCO and took the necessary steps to file it. As there is no order of the Registrar under Rule 37.02(3), there is no order for me to vary, amend or set aside pursuant to my authority under Rule 37.14(3). RBC has not referred me to any other statutory provision which provides a Master with the authority to vary, amend or set aside the Arbitration Order or any order of FSCO, as filed with this Court or otherwise, or to set aside the Writs in the present circumstances.

[35] In arriving at this conclusion, it is unnecessary for me to consider whether a Master’s jurisdiction is limited to motions, and specifically motions in “proceedings” (actions and applications) and I decline to do so.

[36] RBC’s submission that the Writs should be set aside because the LAT has exclusive jurisdiction over disputes related to SABS ignores that s. 19 of the SPPA explicitly provides for the filing and enforcement of the Arbitration Order. The Insured’s entitlement to exercise his right to have the Arbitration Order enforced as an order of this Court flows from and does not intrude upon the LAT’s jurisdiction.

[37] Accordingly, the motion to set aside the Writs is dismissed without prejudice to RBC’s right to bring it before a Judge. I make no comment on a Judge’s jurisdiction to set aside the Writs.

[38] In the alternative, RBC requests that I stay the Writs under s. 106 of the Courts of Justice Act (Ontario) pending the disposition of the Applications by the LAT:

106 A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[39] The court has broad, highly discretionary powers to grant stays including staying the enforcement of an order or judgment which should be exercised very sparingly (Worldwide Recovery Inc. v. A.W. Anderson Management Inc., 2012 ONSC 3657 at para. 16). Stays of final orders or judgments are granted only in very rare circumstances where it would be oppressive, vexatious or an abuse of process and would not cause an injustice to the execution creditor (Worldwide at paras. 16-17).

[40] While I am satisfied that a Master has jurisdiction under s.106 of the Courts of Justice Act to stay the Writs, I refuse to do so. Upon filing, the Arbitration Order was deemed to be an order of this Court. Therefore, the court, which includes a Master, has the discretion to grant a stay of its enforcement. However, the present case is far from the kind of rare circumstances which call for a stay of the Writs. The Insured was not engaging in any oppressive or vexatious conduct or abuse of process by filing the Arbitration Order and obtaining the Writs. He was availing himself of his statutory right under s. 19 of the SPPA and to deprive him of this right would result in an injustice. The disputes between the parties over the quantum of the Insured’s IRB payments, RBC’s request for documents and any variation of the Arbitration Order or other issues are within the jurisdiction of the LAT and may be addressed in the Applications.

IV. Disposition and Costs

[41] Order to go on the terms set out above. If the parties cannot agree on the costs of this motion, they may file written costs submissions not to exceed 4 pages (excluding Costs Outlines) with me through the Masters’ Administration Office on a timetable to be agreed upon by counsel. If counsel cannot agree on a timetable, a telephone case conference may be scheduled.

Released: March 16, 2020

Master M.P. McGraw