George Bernicky v. Guardian Insurance Company of Canada, 1994 ONICDRG 60

Ontario Insurance Commission

Neutral Citation: 1994 ONICDRG 60

File No.: A-006268

Between:

George Bernicky Applicant

and

Guardian Insurance Company of Canada Insurer

Decision on Interim Expenses

Issues:

A pre-hearing conference in this case was held on April 12, 1994. The Applicant, Mr. George Bernicky attended, represented by Mr. James E. S. Allin. Mr. Bill Ballentine attended on behalf of Guardian Insurance Company of Canada, represented by Mr. Cameron C. R. Godden. At the pre-hearing, Mr. Allin asked that Mr. Bernicky be awarded certain interim expenses, under section 282(11.1) of the Insurance Act, R.S.O. 1990, c.I.8 as amended by the Insurance Statute Law Amendment Act, 1993. Mr. Godden submitted that no interim expenses should be awarded.

The issues in this hearing are:

1. Does section 282(11.1) of the Insurance Act, as amended, apply to motor vehicle accidents and/or applications for arbitration filed prior to January 1, 1994?

2. Is Mr. Bernicky entitled at this time to be paid for expenses incurred by him for copies of the clinical notes and records of Parkwood Hospital and the medical-legal report of Dr. James E. Allen?

Result:

1. Section 282(11.1) of the Insurance Act, as amended, applies to all existing arbitration proceedings after January 1, 1994, whether the proceedings were initiated before or after January 1, 1994.

2. Mr. Bernicky is entitled to be paid at this time for expenses incurred by him for copies of the clinical notes and records of Parkwood Hospital ($150.00) and for the medical-legal report of Dr. James E. Allen ($650.00).

This decision may be reviewed by the hearing arbitrator and, in his or her discretion, amounts awarded to Mr. Bernicky as interim expenses may be ordered to be repaid to Guardian Insurance Company of Canada.

Hearing:

The issues in this hearing were dealt with by way of written submissions, following the pre-hearing discussion. I received written submissions, dated April 18, 1994 and June 8, 1994, from Mr. Allin, on behalf of Mr. Bernicky. I also received written submissions, under cover of a letter dated April 28, 1994, from Mr. Godden, on behalf of Guardian Insurance Company of Canada.

Reasons for decision:

a) Nature of the application for interim expenses:

Mr. Allin sought an order requiring Guardian Insurance Company of Canada ("Guardian") to reimburse Mr. Bernicky at this time for expenses incurred by him for the following:

(i) notes and records of a treating hospital, the Parkwood Hospital, in London, Ontario, in the amount of $150.00; and

(ii) a medical-legal report from Mr. Bernicky's treating orthopaedic physician, Dr. James E. Allen, in the amount of $650.00.

Mr. Allin stated that he had requested the notes and records of Parkwood Hospital and as soon as he received them, copies would be served on Guardian and filed with the Commission. Mr. Allin stated that a copy of the medical-legal report of Dr. Allen has been served on Guardian and filed with the Commission.

b) Basis for the application for interim expenses:

Mr. Allin sought the award for interim expenses under section 282(11.1) of the Insurance Act, as amended by the Insurance Statute Law Amendment Act, 1993. Section 282(11.1) of the Insurance Act, as amended, provides as follows:

The arbitrator may at any time during an arbitration proceeding, make an interim award of expenses, subject to such terms and conditions as may be established by the arbitrator.

Section 282(11.1) came into force on January 1, 1994. Mr. Bernicky was injured in a motor vehicle accident and applied for and received statutory accident benefits from Guardian prior to January 1, 1994.

Further, he filed his Application for Appointment of an Arbitrator with the Commission prior to January 1, 1994. Therefore, the preliminary issue is whether section 282(11.1) of the Insurance Act, as amended, applies to a motor vehicle accident and/or an application for arbitration filed prior to January 1, 1994.

(c) Preliminary Issue

The general rule is that a statute is not to be interpreted as having retrospective or retroactive operation unless such an interpretation is expressly or by necessary implication required by the language of the statute.

In Construction of Statutes, 2nd Edition, (1983), Elmer A. Driedger defines a statute as having retrospective effect when it "...operates as of a past time in the sense that it opens up a closed transaction and changes it consequences, although the change is effective only for the future". (p. 186)

In The Interpretation of Legislation in Canada, 2nd Edition, (1991), Pierre-André Côté writes at p. 117:

A statute has a retroactive effect when it is deemed to operate in the past (retro agere). Roubier says that such statutes "purport to apply to events which have already taken place", and he defines retroactivity as "the process of antedating the operation of the statute to a time prior to prior to its commencement, or the fictitious pre-existence of a statute" [Paul Robier, Le droit transitoire (conflit des lois dans le temps), 2nd ed., Paris; Dalloz et Sirey, 1960].

And, at p. 137, Pierre-André Côté writes: "A statute has immediate effect when it applies to a legal situation that is ongoing at the moment of its commencement: the new statute governs the future development of this situation."

In my view, the application of section 282(11.1) of the Insurance Act, as amended, to arbitration proceedings currently before the Commission whether or not commenced before January 1, 1994 is not a retroactive or retrospective application. Therefore, the presumption against the retroactive or retrospective operation of a statute does not apply. In my view, the section has an immediate effect on arbitration proceedings ongoing on January 1, 1994 and the application of the section to future arbitration proceedings can by its very nature be a prospective operation only. I conclude that section 282(11.1) of the Insurance Act, as amended, applies to all arbitration proceedings currently before the Commission whether commenced before or after January 1, 1994.

(d) Is the Applicant entitled to an interim award of expenses?

Section 282(11) of the Insurance Act, as amended, provides:

The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

Section 282(11.1) of the Insurance Act, as amended, gives an arbitrator the authority to deal with expenses in an interlocutory manner. Such a decision must be made in an expeditious manner on the basis of evidence which will often be insufficient for the purpose of the final decision.

Mr. Allin submitted that the general policy of the Commission is that even where applicants are unsuccessful in their claim for benefits, they nevertheless may be reimbursed for their expenses associated with pursuing their claim. Mr. Allin submitted that accordingly, even if Guardian is successful in this arbitration, in all likelihood the expenses that are now being sought will be ordered to be paid at that time. Given that these expenses will at some point in time be paid by Guardian to Mr. Bernicky, it is appropriate that the payment be ordered now as opposed to the conclusion of the hearing.

I disagree. While arbitrators have generally awarded applicants their expenses of the arbitration even where the application has not been successful, in a significant number of cases, arbitrators have denied expenses of the arbitration in part or in full¹.

In my view, the proper time for the question of expenses to be decided is after all the issues, evidence and arguments have been placed before an arbitrator. I consider that a pre-hearing arbitrator should exercise his or her discretion to award interim expenses only in restricted circumstances. Any interim award of expenses made may be reviewed and varied by the hearing arbitrator.

I believe that an interim award of expenses incurred in respect of an arbitration proceeding for medical documents is appropriate in the following circumstances: (i) where the Application for Appointment of an Arbitrator raises a bona fide issue; (ii) where the expenses claimed are reasonable and necessary for the conduct of the arbitration; and, (iii) where the applicant is unable to carry the expenses claimed until the arbitration hearing.

The first circumstance, i.e., a bona fide issue, flows directly from the principle generally applied by arbitrators as to when expenses may be awarded to an applicant. The principle was first enunciated by Senior Arbitrator Susan Naylor in the case of Ralph McCormick and Economical Mutual Insurance Company, October 2, 1991, OIC File No. A-000139 as follows:

The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.

Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.

This principle was approved by the Director of Arbitrations in Vito Luigi Calogero and The Co-operators General Insurance Company, February 13, 1992, OIC File No. P-000251.

With respect to the second circumstance, i.e., the necessity for and reasonableness of the expense claimed, section 5(1) of Ontario Regulation 664 under the Insurance Act, as amended, indicates that an award of expenses may be made:

3. For a report prepared by an expert, provided to the other parties to the arbitration or hearing and necessary for the conduct of the arbitration or hearing, in accordance with subsection (4).

Subsection 5(4) of Ontario Regulation 664 provides:

The maximum amount that may be awarded for a report prepared by an expert is $800.

With respect to the third circumstance, i.e., the inability to carry the expenses claimed until the arbitration hearing, I consider that the awarding of interim expenses should be restricted to the narrow situations where the need is such that lack of funds or financial resources will impair the ability of an applicant to conduct or continue the arbitration. Otherwise undesirable consequences flow such as an increase in the cost, length and complexity of proceedings.

In determining whether this is an appropriate case in which to exercise my discretion to make an interim award of expenses, I will apply the criteria outlined above.

i) Does the Application for Appointment of an Arbitrator raise a bona fide issue?

The issues in dispute in this arbitration are as follows:

1. Weekly Income Benefits - Ongoing Entitlement:

Is Mr. Bernicky entitled to weekly income benefits, under section 12 of Ontario Regulation 672², after August 12, 1993?

2. Supplementary Medical and Rehabilitation Benefits:

a) Is Guardian Insurance Company of Canada required to pay Mr. Bernicky for the cost of a home spa, under section 6(1)(e) or 6(1)(f) of the Schedule?

b) Is Guardian Insurance Company of Canada required to pay for the cost of Mr. Bernicky's membership at the Wheels Fitness Facility, so that he can undertake a supervised exercise program, under section 6(1)(c) or 6(1)(f) of the Schedule?

c) Is Guardian Insurance Company of Canada required to pay for a vocational or occupational assessment at the London Regional Evaluation Centre for the Injured, under section 6(1)(c) of the Schedule?

d) Is Guardian Insurance Company of Canada required to pay for baby-sitting expenses incurred by Mr. Bernicky when attending for treatment, under section 6(1)(f) of the Schedule?

In this case, Mr. Godden submitted that Guardian is in possession of surveillance evidence taken in June 1993 which questions the validity of Mr. Bernicky's claims.

I have not seen the surveillance evidence referred to by Mr. Godden. It would be inappropriate to deny Mr. Bernicky's application for interim expenses based merely on Mr. Godden's submission. The medical-legal report of Dr. Allen, an orthopaedic surgeon, dated March 3, 1994, has been filed with the Commission. Based on a review of this report, I am satisfied that Mr. Bernicky's Application for Appointment of an Arbitrator raises a bona fide issue.

ii) Are the expenses claimed necessary for the arbitration?

With respect to Mr. Bernicky's claim for interim expenses for the Parkwood Hospital notes and records, I note that during the pre-hearing conference, Guardian requested copies of these notes and records. I assume that because Guardian requested these notes and records that it considers that they are relevant to the issues in the arbitration and necessary in understanding Mr. Bernicky's claims.

I did not receive any evidence or submissions with respect to the reasonableness of the expense incurred for these clinical notes and records. Accordingly, I assume that Guardian considers that the fee of $150.00 for the notes and records is reasonable.

With respect to the medical-legal report of Dr. James E. Allen, Mr. Godden submitted that I should not exercise my discretion to make an interim award of expenses because Guardian has been provided with numerous other medical reports with respect to Mr. Bernicky's condition up to the August 1993 date and thereafter. Therefore, Mr. Godden submitted that the parties are in a position to provide the hearing arbitrator with numerous medical documents on which to base a decision, without the additional report of Dr. Allen.

I have not been provided with copies of the "numerous medical reports" which have been provided to Guardian. In his submissions, Mr. Godden listed the medical reports provided to Guardian. However, from a review of the list, I am unable to determine whether, absent Dr. Allen's March 1994 report, the parties will be in a position to provide the hearing arbitrator with a medical-legal report with respect to Mr. Bernicky's ongoing disability, if any, as of March 1994, by a treating orthopaedic specialist.

Dr. Allen's is the only medical-legal report in my file. In reviewing his report, I am satisfied that it meets the requirements set out in section 5(1)3. of Ontario Regulation 664. It is a medical-legal report by a treating orthopaedic specialist. It has been provided to Guardian and filed with the Commission. It is relevant to the issue of Mr. Bernicky's entitlement to weekly income benefits, under section 12 of the Schedule, after August 12, 1993. It speaks to the degree of disability suffered by Mr. Bernicky and his ability to return to his pre-accident employment. And, as noted above, it appears to be the only medical-legal report available by a treating orthopaedic specialist with respect to Mr. Bernicky's on-going disability, if any, as of March 1994. I find therefore that the report is necessary for the conduct of the arbitration.

Again, no evidence was introduced or submissions made with respect to the reasonableness of the amount claimed. Based on the fullness of the report, I find that the cost of $650.00 for the report is reasonable.

iii) Is the applicant unable to carry the expenses claimed?

Mr. Allin submitted that Mr. Bernicky has no source of income other than General Welfare Assistance. He has claimed accident benefits from Guardian but those benefits have been denied since August 12, 1993. Mr. Allin submitted that in these circumstances, Mr. Bernicky and his family cannot afford to carry the expenses claimed from now until the hearing of the matter.

In his submissions, Mr. Godden did not comment on Mr. Bernicky's ability or inability to carry the expenses claimed from now until the hearing of the matter. Therefore, I accept Mr. Allin's statement that Mr. Bernicky is unable to carry the expenses claimed until the arbitration hearing.

Conclusion:

I find that this is an appropriate case in which to exercise my discretion to make an interim award of expenses. Accordingly, I make an interim award of expenses in the amount of $150.00 for the clinical notes and records of Parkwood Hospital and in the amount of $650.00 with respect of the medical-legal report of Dr. Allen. My decision may be reviewed by the hearing arbitrator and, in his or her discretion, amounts awarded as interim expenses may be ordered to be repaid to Guardian.

Order:

1. Mr. Bernicky is entitled to interim expenses of $150.00, for the clinical notes and records from the Parkwood Hospital, in London, Ontario.

2. Mr. Bernicky is entitled to interim expenses of $650.00, for the medical-legal report of Dr. James Allen.

This decision may be reviewed by the hearing arbitrator and, in his or her discretion, amounts awarded as interim expenses may be ordered to be repaid to Guardian.

July 6, 1994

Shemin Manji Arbitrator

Footnotes

1. 1See Thai Tru Luong and Toronto Transit Commission, September 19, 1991, OIC File No. A-000027, Marcel Richardson and Royal Insurance Company of Canada, November 3, 1992, OIC File No. A-001141, Kwabena Nyamekye and Lloyd's Non Marine Underwriters, December 17, 1992, OIC File No. A-001136, Pietro Manti and Wawanesa Mutual Insurance Company, December 17, 1992, OIC File No. A-001496, Isaiah Alleyne and Royal Insurance Company of Canada, February 18, 1993, OIC File No. A-001107, Allan Wells and AXA Insurance (Canada), April 15, 1993, OIC File No. A-001030, Mary Parisien and Royal Insurance Company of Canada, May 26, 1993, OIC File No. A-001978, Francis Nand and State Farm Mutual Automobile Insurance Company, May 28, 1993,OIC File No. A-001893, Said Mohamed Hassan and Kingsway General Insurance Company, (under appeal) November 10, 1993, OIC File No. A-002188, Andreas Kosmopoulos and Victoria Insurance Company of Canada, (under appeal) November 10, 1993 OIC File No. A-002264, Shaharazad Sharon Bacchus and Wellington Insurance Company, December 7, 1993, OIC File No. A-004634, Ravinder Khanna and State Farm Mutual Automobile Insurance Company, (under appeal) January 26, 1994, OIC File No. A-001665, Mark Cooper and Jevco Insurance Company, April 13, 1994, OIC File No. A-005905, Dalvir S. Nijjar and Co-Operators General Insurance Company, April 14, 1994. OIC File No. A-004436, Ernesto Ieritano and Security National Insurance Company, May 10, 1994, OIC File No. A-003552 and Melinda J. Upper and Canadian General Insurance Company, June 3, 1994, OIC File No. A-002855.
2. 2Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.