In the Gonsalves and Certas Direct Insurance Company case, (Divisional Court – July 13, 2011, Court File No. 87/10) the respondent, Denise Gonsalves sought payment of a non-earner benefit from Certas. The arbitration was scheduled to commence on September 21, 2009. One month prior to the commencement of the arbitration, Ms. Gonsalves served two orthopedic opinions which opined that she met the disability test for non-earner benefits.
Certas requested an adjournment and an order that Ms. Gonsalves attend an insurer’s orthopedic examination. The arbitrator agreed and made that order. The arbitration was re-scheduled for February 2010.
Ms. Gonsalves appealed to the Director’s Delegate and refused to attend the insurer’s orthopedic examination. The Director’s Delegate overturned the arbitrator’s order. Certas applied for judicial review.
The Divisional Court held that fundamental to any administrative process is the requirement that it be fair. If the arbitration were allowed to proceed in the absence of an insurer’s orthopedic examination, the insurer would have no practical way to respond to the opinion which was served 31 days prior to the arbitration. The insurer would be denied the right to make a full response. It was not enough to say that the delivery of the reports was made within the permitted time frame when they provided new evidence to support a new position. This was trial by ambush.
The Court found that the determination of the Director’s Delegate that the arbitrator made an error in law in granting a stay to allow for an insurer’s examination was unreasonable and cannot stand.
The Director’s Delegate unreasonably fettered the discretion of the arbitrator by requiring “extraordinary circumstances” or “unavoidable delay” as conditions precedent to the adjournment.
The Court allowed the application and held that the arbitration will proceed on its merits after Ms. Gonsalves attended the insurer’s examination.
