



COURT OF APPEAL FOR ONTARIO

CITATION:
Younis v. State
    Farm Mutual Automobile Insurance Company,

2012 ONCA 836

DATE: 20121129

DOCKET: C55216

Simmons, Juriansz and Epstein JJ.A.

BETWEEN

Nebal Younis

Plaintiff (Respondent)

and

State Farm Mutual Automobile Insurance Company

Defendant (Appellant)

and

Insurance
    Bureau of Canada and Ontario Trial Lawyers Association

Interveners

Eric K. Grossman, for the appellant State Farm Mutual
    Automobile Ins. Co.

Roman Baber, for the respondent Nebal Younis

John Craig, for the intervener Insurance Bureau of
    Canada

M. Steven Rastin and Stanley Pasternak, for the
    intervener Ontario Trial Lawyers Association

Heard: July 16, 2012

On appeal from the order of Justice G.P. DiTomaso of the Superior
    Court of Justice, dated February 21, 2012.

Juriansz
    J.A.:

[1]

This appeal was heard with four other appeals, which were released
    concurrently with this decision. Like the other appeals, this appeal raised the
    question of when, in light of s. 281(2) of the
Insurance Act
, R.S.O.
    1990, c. I.8 (the Act), insured persons can commence court actions against
    their own insurers to claim benefits under the
Statutory Accident Benefits

Schedule
, O. Reg. 34/10 (SABS).

[2]

Section 281(2) provides:

281. (2) No person may bring a
    proceeding in any court, refer the issues in dispute to an arbitrator under
    section 282 or agree to submit an issue for arbitration in accordance with the
Arbitration
    Act, 1991
unless mediation was sought, mediation failed and, if the issues
    in dispute were referred for an evaluation under section 280.1, the report of
    the person who performed the evaluation has been given to the parties.

[3]

As can be seen, s. 281(2) prevents insured persons from commencing court
    actions or proceeding to arbitration unless they have first sought mediation and
    mediation has failed.

[4]

The Financial Services Commission of Ontario (FSCO) is the
    administrative agency responsible for administering Ontarios statutory scheme
    regulating auto insurance. FSCO has developed a significant backlog of
    mediations. The insured person in this case, like the insured persons in the
    other cases, commenced court proceedings before their cases were mediated by
    FSCO. In all the appeals, the insurers applied to stay or dismiss the court
    proceedings as being barred by s. 281(2). The motion judges in all cases
    dismissed the insurers motions. The insurers appealed to this court.

[5]

The four other appeals involve similar facts and circumstances and the
    court issued one set of reasons that applied to all of them. The court
    concluded that the legislative scheme for the resolution of disputes set out in
    ss. 280 to 283 of the Act, the SABS and FSCOs Dispute Resolution Practice Code
    requires that the mediation process
be
    completed within 60 days from the filing of an application for mediation with
    FSCO, unless the parties agree to an extension of time. Once the 60-day time
    limit has expired, the parties may commence a court action or proceed to
    arbitration.

Subsection
    281(2) postpones

the right of insured persons to commence
    civil actions against their insurer in order to allow the mediation process to
    be completed within the time prescribed, but leaves them free to commence
    actions once that period has expired.

[6]

On this reasoning, the insurers appeals in the other four cases were
    dismissed, as the respondents commenced their court proceedings after the 60-day
    time period for mediation had expired.

[7]

The facts of this case differ from the four other appeals. This
    difference in facts leads to a different result. I would allow the appeal.

[8]

In this case, the respondent was injured in a motor vehicle accident on
    June 28, 2010. He filed a claim with the appellant for statutory accident
    benefits. The appellant denied certain benefits and a dispute arose. On July
    14, 2011, the respondent made an application to FSCO for mediation. A few days
    later, on July 22, 2011, he commenced the civil action that is the subject of
    this appeal. The appellant, relying on s. 281(2) of the Act, brought a motion
    to stay the civil action pending the holding of an actual mediation of all the
    issues in dispute by FSCO.

[9]

The motion was heard on February 21, 2012, well after the 60 days
    prescribed for the completion of mediation. The motion judge followed the
    reasoning of Sloan J. in
Cornie v. Security National Insurance Co.
,
    2012 ONSC 905, 109 O.R. (3d) 780, and concluded, as did this court in the
Cornie
appeal, that s. 281(2) of the Act allows an insured person to bring a civil
    proceeding if mediation was sought and mediation has not been completed within
    60 days of the filing of an application for mediation. An application is
    filed when it is delivered to FSCO.

[10]

The
    motion judge found that the respondent had satisfied the requirement of s.
    281(2), as mediation did not take place within 60 days of the respondent
    filing his application with FSCO. The motion judge concluded that the balance
    of prejudice as between the plaintiff and State Farm favours the continuation
    of the action.

[11]

On
    this reasoning, the motion judge declined to stay the action.

[12]

I
    would allow the insurers appeal. The motion judge evidently approached the
    motion as one that called upon the court to exercise its inherent jurisdiction
    to stay an action. However, the insurers motion called upon the court to apply
    a statutory bar to the commencement of an action. The terms of s. 281(2) of the
    Act are clear. No person may bring a proceeding until mediation has failed. The
    respondent jumped the gun and brought this proceeding before that had occurred.

[13]

I
    appreciate that by the time the motion to stay came before the court the 60-day
    time period had expired. From the practical perspective adopted by the motion
    judge, there would seem to be no reason to require the respondent to start
    again. However
,
the respondent commenced his action in
    contravention of the statute and the statute must be applied. Insured persons
    cannot commence civil actions until mediation has failed. To conclude otherwise
    would allow all insured persons to immediately commence civil actions knowing
    that the insurers motions to stay are not likely to be heard until after the
    expiration of the 60 day time period. The statute does not permit this
    stratagem.

[14]

The
    appeal is allowed. As the commencement of the action was statute-barred, it is
    quashed.

[15]

The
    appellant did not seek costs. There will be no order as to costs.

R.G. Juriansz J.A.

I agree J.M. Simmons
    J.A.

I agree Gloria
    Epstein J.A.

Released:
November 29, 2012


