In Waldock v State Farm Mutual Automobile Insurance Company 2019 ONSC 6105, the Divisional Court granted, in part, an application for judicial review seeking to overturn a decision of FSCO Director’s Delegate Edward Lee, and in turn restore decisions made by FSCO Arbitrator Knox Henry.
This case concerned an arbitration which took place at the Financial Services Commission of Ontario. In that hearing, Arbitrator Henry made a preliminary decision that Mr. Waldock has suffered a “catastrophic impairment.” Further to that decision, he concluded that Mr. Waldock was entitled to attendant care, housekeeping and home maintenance benefits (“AHHB”), payment of his costs and disbursements, and of note – a special award. Arbitrator Henry found that the special award was payable due to State Farm unreasonably withholding or delaying payments to Mr. Waldock.
When the appeal of these decisions came before him, Delegate Lee found that Mr. Waldock’s entitlement to AHHB was never an issue properly before Arbitrator Henry, and therefore Arbitrator Henry had exceeded his jurisdiction by determining entitlement to these benefits. Additionally, Delegate Lee concluded that State Farm was denied natural justice as it had not received notice that these issues would be determined.
Further, Delegate Lee found that the special award granted by Arbitrator Henry was also not properly before him, as it had not been included in the arbitration from the beginning, and had not been stated as a remaining issue to be determined after the preliminary hearing finding that Mr. Waldock had suffered a catastrophic impairment.
Mr. Waldock sought judicial review of Delegate Lee’s findings and the matter came before the Divisional Court. Justice Lorne Sossin, writing for a unanimous panel which included Justice Corbett and Justice Gray, concluded that arbitrators are accorded broad discretion to consider matters in dispute, and that Arbitrator Henry therefore had inherent discretion to find that a special award was due to Mr. Waldock. The Court also concluded that State Farm had not been denied procedural fairness, and that Delegate Lee was unreasonable in finding so.
The Court also found that Delegate Lee’s conclusion that Arbitrator Henry had failed to provide a justification for the award of the AHHB benefits based on the evidence before him, could not stand. The Divisional Court panel found that Arbitrator Henry had provided reasons that made clear the basis for his findings for entitlement to those benefits, and that his findings on the issue were among the range of acceptable outcomes open to him.
The only finding of Delegate Lee which was not overturned by the Divisional Court was in respect of the legal fees awarded by Arbitrator Henry not being in accordance with the FSCO Dispute Resolution Practice Code.
This case is a stark reminder that the inherent jurisdiction afforded to Arbitrators is vast, and that special awards and benefits, even those not specifically pleaded in the materials, may be granted based on the evidence before the Arbitrator.
Jessica Telfer is an associate at the firm and author of this blog. If you have a quesiton about this decision or a similar file, please contact Jessica at 416-777-5228.