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Is there always a Multiplicity of Proceedings?

De Corso and Royal & Sun Alliance Insurance Company of Canada1 Motion Decision: (January 29, 2009, Court File No. C-236-08, before Hambly J., in Kitchener)

Brad Moscato and Corey Sax of Howie, Sacks & Henry LLP successfully resisted a Motion brought by the Defendant insurer seeking a dismissal or stay of an Arbitration. The insurer argued that a court action and an arbitration cannot both be brought on the same or similar issues, and sought the dismissal or stay.

By way of background, the Plaintiff was involved in a motor vehicle accident, where she suffered serious injuries, and had a Glasgow Coma Score of 7 at the scene of the accident.

The Plaintiff filed an Application for Arbitration to determine the issue of whether she was catastrophically impaired.

The Plaintiff also brought a court action. The Statement of Claim seeks weekly income replacement benefits, medical benefits, rehabilitation benefits, pre- and post-104 week attendant care benefits, costs of examination, post 104 housekeeping and home maintenance benefits, and punitive, aggravated and exemplary damages, interest and costs.

The Arbitration was scheduled to be heard shortly after the January 2009 motion, while the civil trial is a long way from being heard.

The insurer brought its Motion before the Superior Court seeking a dismissal or stay of the Arbitration. It argued that the issues in the court action and the issues in the arbitration proceeding created a multiplicity of proceedings and would result in duplication of evidence. It asserted that the issues in the Statement of Claim hinge on a finding of Catastrophic Impairment, which was also the focus of the Arbitration.

While the Court noted an insured person may not proceed before a court and an arbitrator in respect of the same matter or issues in dispute, he or she may proceed before a court and an arbitrator in respect of a different matter or unrelated issues in dispute.

The Court held that the issue of whether the Plaintiff is catastrophically impaired is a narrow, discreet issue that can be decided by an arbitration in the hearing.

In reaching its decision, the Court pointed out that both counsel agreed that the finding in the arbitration on the issue of Catastrophic Impairment would be binding in the civil action. In other words, the issue would be res judicata in the action.

Further, the Court held that it is the insured, and not the insurer, who has the right to seek a determination of issues by way of arbitration under the Insurance Act: see Liberty Mutual Insurance Company v. Fernandez.2

Thus, the Court held that a finding at the arbitral level would serve to save valuable court time, costs and expense and likewise save valuable time, costs and expense for all parties.

Finally, the Court noted a further difficulty with the insurer’s motion. It was brought under Rule 21.01(3) of the Rules of Civil Procedure, which states the following:

A Defendant can move before a judge to have an action stayed or dismissed on the ground that the court has no jurisdiction over the subject matter of the action.

And:

Another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter.

The insurer did not seek to stay or dismiss the action. It sought to stay or dismiss the arbitration. Thus, the Court did not have jurisdiction to grant the relief the insurer sought in any event.