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Fairness - Cross-Examination. Arvanitopoulos v. Wawanesa Mutual Insurance Co.
In Arvanitopoulos v. Wawanesa Mutual Insurance Co. (Div Court, 2024) the Divisional Court dismissed a JR against an IA s.128 umpire "appraisal hearing and outcome", here on procedural fairness grounds in the nature of aggressive cross-examination:[3] In the fall of 2022, the parties participated in an appraisal proceeding under s. 128 of the Insurance Act, R.S.O. 1980, c. I.8. The purpose of an appraisal is to help the parties fix the value of the insured claims. In the appraisal, the parties sought to agree upon or fix the values of the damage to the house and contents, and to determine the alternative living expenses reasonably incurred by the applicants due to the insured fire event.
[4] In Intact Insurance Co. v. Laporte (c.o.b. Warrior Gear), 2024 ONCA 454, the Court of Appeal recently described an appraisal process in this way:[4] A s. 128 settlement process is meant to be an easy, expeditious, collaborative, and cost-effective way of settling disputes about appraisals: Desjardins General Insurance Group v. Campbell, 2022 ONCA 128, 467 D.L.R. (4th) 480, at para. 36. It begins with each party appointing an appraiser of their own. If the appraisers cannot resolve the matter between them, an umpire whom they have appointed will determine the matter. ....
Preliminary Note
[6] The applicants submit that this multi-day appraisal, that took multiple years in its establishment, was anything but the easy, expeditious, collaborative process it was supposed to be. Rather, they say they and their witnesses were bullied by an overly aggressive appraiser for the insurer. They submit that they were subjected to a most unfair resolution in which the umpire decided the key values based on his own site visit and ignoring the evidence and submissions of both parties.
[7] I have nothing good to say about the behaviour of the insurer’s appraiser John Valeriote. He did not deny the evidence that he threatened the livelihood of the applicants’ expert witness. He weakly contests the evidence that he acted as an unrestrained bully throughout the hearing.
[8] On the facts of this case, for the reasons that follow, I do not find that that Mr. Valeriote’s misconduct deprived the applicants of procedural fairness. Despite that conclusion, umpires should understand their right and, indeed, their obligation to ensure that all appraisal participants behave with respect and decorum befitting a legal proceeding - especially one that is supposed to embody a collaborative process.
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[14] In an application for judicial review, the court will consider whether the proceeding under review was conducted in accordance with the principles of procedural fairness with reference to the factors discussed by the Supreme Court of Canada in Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817, paras. 23-28.
[15] In addition, on an application for judicial review, the court exercises a supervisory role. Rather than looking to correct substantive errors on an appeal, the court’s role on judicial review is to ensure that the decision maker performed his or her statutory assignment properly – both reasonably and fairly.
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Procedural Fairness
[21] The essence of natural justice, and its progeny doctrine of procedural fairness, is that each party to a proceeding has the right to know the case they have to meet and to adduce the evidence and argument necessary to do so. The formality of the process for hearing from the parties required for procedural fairness can vary such as simple discussion or an exchange of letters, all the way to a formal trial subject to the rules of evidence with all of its strictures and procedural glory.
[22] In this case, despite the conduct of Mr. Valeriote, as the representative of the insurer, the evidence of the applicants and their expert witness is that they knew the issues and had the opportunity to present truthfully the evidence they wished to present. At paras 23-41 the court walks through their assessment of the evidence substantiating this conclusion. The court continues:[55] While the award does not provide any detail at all as to how the umpire came to his final conclusion, it is self evident that he reduced the agreed value of the goods by a factor of more than 50% to reflect his finding on the salvageable state of the goods or as a compromise of the parties’ positions. The insurer’s appraiser agreed and signed the appraisal.
[56] Appraisers appointed by parties are generally not lawyers. They bring valuation expertise to the insurance claim. If the appraisers cannot agree, they appoint an umpire who is empowered to bring the appraisers to a resolution that he and at least one of them accept. The umpire is expected to have expertise and to bring it to bear. Here, the umpire did nothing unilaterally. He told the appraisers of his concern and invited them to attend with him. He then told them of his finding and invited submissions. He explained the process in his award. This was as it should be.
The Building Loss Value
[57] There was competing evidence brought by the appraisers to the umpire. The applicant provided a detailed current costing. The insurer relied on reports obtained shortly after the fire, remediation estimates, amounts actually paid, and an engineering report written in 2022 as a result of site visits ordered by the court. The insurer submitted it had fully indemnified the applicants by paying $312,038.04 toward the building claim.
[58] It is apparent from the award that the umpire accepted the insurer’s position.
[59] The values determined are questions of fact. The applicants seem to be arguing that because only they submitted an up-to-date costing, the umpire was bound to accept their position. That is not the law however. The umpire was entitled to accept as fact the more limited scope of work and other materials submitted by the insurer.
[60] Judicial review is generally not available on facts unless the decision maker fundamentally misapprehends the evidence or fails to take into account relevant evidence before it. The court is not to reweigh the evidence: see Vavilov, at paras. 125-126. I see no basis to reweigh the evidence in this case. . Reisher v. Westdale Properties [for numbered case cites see main link]
In Reisher v. Westdale Properties (Div Court, 2023) the Divisional Court considers how the acceptance of hearsay evidence (absent the ability to cross-examination) is allowed by the SPPA and did not result in procedural unfairness in this case:[45] On behalf of Jeanette Reisher, it is submitted that there was a denial of procedural fairness. In its decision of June 6, 2022, the Landlord and Tenant Board included the observation that:The Landlord’s Property Manager testified that in addition to the two tenants who testified at the hearing, there are three additional tenant[s] who have complained about the tenant’s behaviour but were too afraid to testify at this hearing.[37] [46] This statement indicates reliance on hearsay evidence which was accepted in the absence of any opportunity to question or cross-examine those tenants as to their complaints. The Statutory Powers Procedure Act, which applies to the proceedings of the Landlord and Tenant Board, provides as follows at s. 15(1):Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,
(a) any oral testimony; and
(b) any document or other thing,
relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious. [47] The breadth of this section allows for the admission of hearsay evidence:In proceedings before most administrative tribunals hearsay evidence is freely admissible and its weight is for a matter for the tribunal or board to decide, unless its receipt would amount to a clear denial of natural justice…[38] The court closely-analyses this evidence at paras 48-56.
. Westdale Properties v. Reisher
In Westdale Properties v. Reisher (Div Court, 2023) the Divisional Court considered, and dismissed, a landlord's motion to quash an RTA s.210 appeal on being of "devoid of merit", in part due to the failure of the LTB to allow adequate 'testing' (cross-examination) of evidence:[40] I disagree. A failure to accord procedural fairness may raise a question of law: see Harper v. Sauve, 2022 ONSC 5754 at para. 11. A tenant facing eviction may have a legitimate expectation that they will be able to test “key evidence” that is relied upon to support an eviction order: see Manikam v. Toronto Community Housing Corporation, 2019 ONSC 2083 at para 44. Here, the LTB emphasized the fears of three tenants who did not attend the hearing. . Carr v. Brown
In Carr v. Brown (Div Court, 2022) the Divisional Court allowed two appeals of two LTB virtual eviction applications that were decided in a confused procedure, one that the court characterized as "haphazard, confusing" [para 40]. The problem seems to have arisen from the member's attempt to hear the two related applications together 'to save time', but excluding the tenants from portions of the case that supposedly didn't involve them. The result was legally problematic, for example inviting the tenant's to cross-examine on direct examination that they had been excluded from hearing [para 32].
The court held that the hearing procedure was procedurally unfair, and also an error of law - which allowed it to apply RTA S.210 granting the appeals. The case is an example of how administrative law can degrade justice in Ontario.
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