Francoise L. Dubreuil v. AXA Insurance (Canada), 1999 ONFSCDRS 102

Neutral Citation: 1999 ONFSCDRS 102

FSCO A98-000290

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANCOISE L. DUBREUIL

Applicant

and

AXA INSURANCE (CANADA)

Insurer

DECISION ON EXPENSES

Before:

David Evans

Heard:

By telephone conference call on April 16, 1999.

Appearances:

Debbie Orth for Ms. Dubreuil

John S. McNeil for AXA Insurance (Canada)

Issues:

Francoise L. Dubreuil, a Quebec resident, applied for statutory accident benefits including death benefits from AXA Insurance (Canada) ("AXA"), payable under the Schedule¹ pursuant to paragraph (a) of subsection 51(1). The hearing on her claims was held on January 25, 1999, in Ottawa. In a decision dated February 16, 1999, I dealt with her claims for death benefits arising from the death in a motor vehicle accident in Ontario on September 6, 1995 of her spouse, Robert Dubreuil, a resident of Quebec. I made the following orders, while reserving on the issue of expenses:

1. AXA Insurance (Canada) shall pay Ms. Dubreuil a death benefit of $450.84.

The issue in this further hearing is:

1. Who if anyone is entitled to expenses incurred in respect of this arbitration hearing?

2. What is the amount of expenses to be awarded?

Result:

1. Each party shall bear their own expenses.

EVIDENCE AND ANALYSIS:

Background:

Due to a recalculation of the total amount of death benefits payable under section 51 of the Schedule, AXA agreed at the beginning of the hearing that it owed some amount to Ms. Dubreuil as a death benefit: Ms. Dubreuil had received a Quebec death benefit of $67,600 from the Société de l'assurance-automobile du Québec ("SAAQ"), and the parties agreed that the total amount that could be payable as a death benefit under paragraph (a) of subsection 51(1) of the Schedule was $68,050.84. A mistake in calculation that had the Ontario death benefit worth less than the SAAQ benefit was only discovered a week before the hearing.

Although Ms. Dubreuil claimed the entire Ontario death benefit, I found that she was only entitled to the excess over and above what she received from the SAAQ, namely $450.84.

Furthermore, at the beginning of the hearing, the parties advised me that a dispute regarding funeral benefits under section 52 of the Schedule had been resolved that morning.

Subsection 282(11) of the Insurance Act, as amended, is as follows:

The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Since the application for appointment of an arbitrator was filed after November 1, 1996, it is governed by the amended expenses provisions of the Act and Regulation, which give an adjudicator power to award expenses to either party (not just the insured person, as before). In this case, both parties seek their expenses. Ms. Dubreuil's total $5,848.43 (after adjustments); AXA's total $13,129.44 (including $5,412.07 for the account of Mr. J.J. Gagnon, the expert on Quebec law who testified at the hearing).

Ontario Regulation 664, as amended by Ontario Regulation 464/96, prescribes the following criteria:

An arbitrator may award expenses to an insurer or insured person under subsection 282(11) of the Act if the arbitrator is satisfied that the award is justified, having regard to the following criteria:

1. Each party's degree of success in the outcome of the proceeding.

2. Conduct of the insurer or the insured person that tended to shorten or facilitate the proceeding or that tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders.

3. Whether the proceeding or any position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process.

4. The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.

5. If the insurer or the insured person requests, any written offers to settle made after the conclusion of mediation and before the conclusion of the arbitration in accordance with the rules of practice and procedure applicable to the proceeding, including the terms of the offers, the timing of the offers and the responses to the offers, having regard to the result of the proceeding.

6. Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

I will now consider the relevant heads. No submissions were made regarding offers to settle (paragraph 5), nor was it seriously argued that paragraph 3 applied.

Paragraph 1. — Degree of success:

Ms. Orth submitted that her client had "partial success" in this arbitration because, for instance, the amount of the funeral benefits were settled only the morning of the hearing. However, AXA only received the supporting documentation at that time, despite earlier requests by Mr. McNeil. This "success" had nothing to do with the hearing. I find that Ms. Dubreuil was unsuccessful on her basic proposition.

Paragraph 2. — Conduct:

Both parties initially sought to proceed by way of an Agreed Statement of Facts, written submissions, and oral argument by way of a telephone conference call. However, Mr. McNeil felt that the Statement should include documentation submitted by Ms. Dubreuil to the SAAQ. He expressed concern in a number of letters to Ms. Orth that he had not received the necessary documentation regarding the death and funeral expenses benefits. Ms. Orth only corrected her initial calculation of the Ontario death benefit a week before the hearing, and as noted above she provided the documentation establishing the funeral expense benefit only the morning of the hearing. Mr. McNeil also sought agreement to have the written opinion of the expert, Mr. Gagnon, admitted as a fact.

The settlement conference held approximately a week before the hearing apparently did not go well. According to Ms. Orth's letter of January 19, 1999, her refusal to produce the SAAQ file led Mr. McNeil to take the position that he would agree to no facts and that he would require Ms. Dubreuil to prove all facts including her marriage to the deceased, his death, and the facts of the accident. At the beginning of the hearing, Ms. Orth then brought a preliminary motion whose object was to prevent the expert witness from testifying.

I find that the actions of both parties approximately balance out. Ms. Orth did not act expeditiously in making the correct calculations or in providing the proper documentation. However, Mr. McNeil's requests for the SAAQ file exacerbated the dispute, and the file was not necessary for my determination of the matter. Finally, I found the testimony of the expert helpful in explaining certain aspects of his written opinion.

Paragraph 4. — Degree of Complexity, Novelty Or Significance:

I believe the time dockets provided by counsel help illuminate the complexity of the issues in this hearing. Mr. McNeil claims for 41.8 hours; of that, only five hours represent the attendance at the arbitration. That means that Mr. McNeil spent 88 percent of his claimed time outside the hearing. Some of those hours were for hours prior to the mediation (Ms. Orth, by way of contrast, reduced her hours claimed from 46.6 to 38.3 because time spent for mediation is generally not allowed.) Some of those hours were for work after the arbitration, such as the .2 hours Mr. McNeil claimed for correspondence to Ms. Orth forwarding the cheque for $6,450.84 representing AXA's "maximum" liability. Nonetheless, it is apparent that the total hours claimed against the hours spent at the hearing represent a very high and indeed unusual ratio. I have not even included in this calculation the additional 20 hours set out in Mr. Gagnon's bill to Mr. McNeil.

The matter was also significant, in that I heard new arguments building on arguments presented at other hearings and made findings that insurers will be able to cite regarding the rights of Quebec residents making accident benefit claims in Ontario.

6. — Any Other Relevant Matter:

Arbitrator Alves in Gray and Zurich Insurance Company² held that insurers cannot expect as a matter of course to receive an award of expenses simply because the applicant is unsuccessful at arbitration. She noted that such an approach would discourage applicants from bringing forward legitimate disputes, which would be contrary to the statutory scheme's fundamental goal and objective of facilitating the bringing of such disputes.

However, in this case, Ms. Dubreuil sought to impugn the long-standing Memorandum of Agreement with the Minister of Consumer and Commercial Relations for Ontario dated December 27, 1978 for the purposes of, frankly, double recovery.

Conclusion:

In light of the above, I award neither party their expenses. I find that Ms. Dubreuil's lack of success balances the relative importance of the issue, but the nature of the dispute disinclines me from going further on her behalf.

Interest:

Mr. McNeil submitted that interest should run only from the time that AXA could calculate the benefits. However, as set out by Arbitrator Manji in Mark and Dominion of Canada General Insurance Company,³ the payment and interest provisions of sections 67 and 68 of the Schedule are mandatory. Accordingly, once the entitlement to the death benefits was established, interest must be paid from 30 days after the application for the benefit.

June 8, 1999

David Evans

Arbitrator

Date

Neutral Citation: 1999 ONFSCDRS 102

FSCO A98-000290

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANCOISE L. DUBREUIL

Applicant

and

AXA INSURANCE (CANADA)

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Each party shall bear their own expenses.

June 8, 1999

David Evans

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94 and 463/96.
2. 2(FSCO A97-001660, January 29, 1999)
3. 3(FSCO A96-000341, January 27, 1999)