Neutral Citation: 1995 ONICDRG 199
File Nos. A-008657, A-008665, A-008666, A-008667, A-008668, A-008669, A-008670, A-008671, A-008672, and A-005594
ONTARIO INSURANCE COMMISSION
BETWEEN:
MICHAELU HAILE, BERHANE DEBESSAY, EFREM DEBESSAY, LEMLEM DEBESSAY, YOHANNES DEBESSAY, HABTOM DEBESSAY, FESSEHA DEBESSAY, ASTER DEBESSAY, and EDEN DEBESSAY
Applicants
and
OLD REPUBLIC INSURANCE COMPANY
Insurer
DECISION ON INTERIM EXPENSES
Reasons for Decision:
This is a motion brought on behalf of nine Applicants for an interim award of expenses. The Applicants are the parents and seven siblings of Tesfa Debessay, who died as a result of a motor vehicle accident on May 29, 1992. All nine Applicants reside in Ethiopia. The siblings range in age - at the time of the accident, they were between five and 21 years old.
The expenses of $29,358.00 claimed represent the estimated cost of the Applicants' attendance at an arbitration hearing.
The interim award of expenses is claimed under section 282(11.1) of the Insurance Act, R.S.O. 1990, c.I.8, as amended by section 33 of the Insurance Statute Law Amendement Act, S.O. 1993, c.10. This section states:
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.
In considering the exercise of the discretion to make an interim order, I was referred to two arbitration decisions: George Bernicky and Guardian Insurance Company of Canada, July 6, 1994, OIC File No. A-006268, and Nadine Osbourne and Allstate Insurance Company of Canada and York Fire & Casualty Company, November 18, 1994, OIC File Nos. A-009110 & A-009111. Mr. McCorriston, counsel for the Insurer, also referred me to decisions considering the exercise of a discretion to award interim costs and disbursements in family law matters, under section 249(4) of the Ontario Business Corporations Act, R.S.O. 1990, c.B.16, and under the general costs power contained in section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43.
Interim Award of Expenses
In George Bernicky and Guardian Insurance Company of Canada, Arbitrator Shemin Manji indicated that an interim order of expenses should be made sparingly and only "in restrictive circumstances". In her view, as a general principle,
..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 agree with these comments.
Interim Award - Criteria:
Bernicky concerned payment of disbursements prior to the hearing for medical documents. Arbitrator Manji applied three criteria in determining whether to make the requested order:
(i) whether the Application for Appointment of an Arbitrator raises a bona fide issue;
(ii) whether the expenses claimed are reasonable and necessary for the conduct of the arbitration; and
(iii) whether the applicant is unable to carry the expenses claimed until the arbitration hearing.
These criteria are useful in assisting arbitrators in the exercise of their discretion to make an interim award of expenses, although they may not be applicable in all circumstances.
I note that the expenses claimed here are considerable and involve the cost of bringing applicants who reside outside of Ontario to an arbitration hearing in Ontario. Even assuming that in certain circumstances it would be appropriate to make such an award on an interim basis, this is not such a case.
In my view, the starting point of any application for interim expenses is that an applicant must demonstrate, on the basis of material properly before the arbitrator, that the Application for Appointment of an Arbitrator has some substantive merit.
Arbitrator Manji expressed this requirement in terms of the Application for Appointment of an Arbitrator raising a "bona fide issue". It is clear, however, that in her review of the content of the medical report in issue, Arbitrator Manji addressed the merits of the application and not merely the good faith of the applicant in bringing it. This was also the approach of Arbitrator Julaine Palmer in Osbourne, who referred interchangeably to a requirement that the applicant establish a "prima facie case".
In cases under the Ontario Business Corporations Act, courts have applied a test whether "there is a case of sufficient merit to warrant pursuit". (Organ v. Barnett (1992), 1992 CanLII 7433 (ON CTGD), 11 O.R. (3d) 210, citing Mr. Justice Blair in Ales v. Maurice (1992), 9 C.P.C (3d) 42.)
This language, in my view, best encapsulates the test contemplated by Arbitrators Manji and Palmer, and is consistent with the general principles underlying an award of expenses in arbitration proceedings articulated in Ralph McCormick and Economical Mutual Insurance Company, October 2, 1991, OIC File No. A-000139, and 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.
Circumstances of this case
The Applicants claim entitlement to benefits under section 11 of Ontario Regulation 6721. To qualify for these benefits, each Applicant must show that he or she was principally dependent for financial support on the deceased at the time of the accident.
In support of the motion, Mr. Altor Shields, counsel for the Applicants, filed an affidavit, dated December 6, 1994, sworn by Nighisty (aka. Negiste) Debessay, whom, I was advised, is a sister of the deceased, residing in Canada.
The affidavit comprised nine paragraphs. No exhibits were attached. Three paragraphs speak to the grounds for the application for interim expenses. They state as follows:
In order to present the case of the Applicants it will be necessary for the Applicants to travel from Ethiopia to Toronto.
I am advised by my father, Berhane Debessay, and do verily believe that he, my mother and my siblings do not have funds to be able to finance a trip from Ethiopia to Toronto for the hearing of this Application.
I am advised by Altor Shields, solicitor for the Applicants and I do verily believe that the attendance of Applicants at the hearing to prove their dependency is necessary.
The remainder of the affidavit deals, in summary form, with the amount of the expenses claimed: the cost of obtaining passports for the Applicants, the cost of return airfare from Ethiopia to Toronto, and accommodation and living expenses during the hearing.
Ms. Debessay's affidavit consists of bald assertions that rest almost entirely on unsupported hearsay. The paragraphs cited do not address the merits of the Applicants' case.
Mr. Shields suggested that any deficiencies in the evidence filed in support of the Applicants' motion were remedied by the material filed on behalf of the Insurer.
The Insurer filed an affidavit sworn by Barbara McAfee, an associate of Mr. McCorriston's law firm. Attached to it were several documents. According to the affidavit, this was the only documentary evidence provided to the Insurer in support of the claims.
Appendix A comprises a statement of monthly expenses for the Debessay family, which contained the statement that "Mr5 Tesafus [sic] sent to his family $1,00.00 Etophian [sic] Currency which would be $700.00 U.S.A. Currency". I was not advised of the author of the statement nor of the circumstances in respect of which it was prepared.
Several other documents were provided in Appendix B. There is a copy of two brief handwritten notes, dated October 4, 1993 and September 23, 1993, signed by Haddas E. Berhane and Mussie Tesfagiorgis, respectively. The notes state that Mr. Debessay gave the author money - $1,000 U.S. on July 25, 1991 in the first case, and $2,070 U.S. on April 24, 1992 in the second - which they delivered to Mr. Debessay's family in Ethiopia. No further details about the identity of the authors, or relating to their transactions were provided.
There is also a document, with a covering letter dated June 19, 1992, apparently translated from Amharic to English, signed by "Maquennin Ewnetie, Co-ordinator court Adjudicators, Addis Ababa Urban Duellers Assoc." It appears to represent a form of proceeding before Mr. Ewnetie and Mr. Hagos Zeweldi, adjudicators, in which were taken brief "testimonies" from three neighbours of Mr. Berhane Debessay in Addis Ababa stating that while Mr. Debessay's son was in Canada, he was assisting the family financially by sending them money, and that since his death the family was in financial difficulties.
I was provided with no evidence of the context in which these transactions took place or any other information to enable me to better assess this document. Counsel for the Applicants was unable to shed any light at all on the document. In these circumstances, I am unable to place any weight upon it.
Findings:
In summary, there was minimal material before me to support the Applicants' claim for benefits or to suggest that there was a case of merit which warranted pursuit. No context was given or explanation advanced in respect to the documents that were filed.
In my view, the material provided falls far short of establishing the first criteria required for an interim award; indeed, woefully so.
The material is equally deficient in regards to the two other criteria suggested by Arbitrator Manji for an interim award.
Counsel for the Applicants suggested that the Applicants were principally relying on oral testimony to prove their claim, necessitating their attendance at the hearing. Aside from the obvious difficulties inherent in establishing a claim unsupported by any documentation, I note that no evidence in affidavit or any other form was provided from the Applicants themselves. It is entirely speculative whether each or any of the Applicants has any information to give that bears on the issues in this proceeding, especially in light of the tender years of some of them.
The motion is dismissed.
Susan Naylor
Senior Arbitrator
Date