Financial Services Commission of Ontario
Neutral Citation: 1999 ONFSCDRS 93 FSCO A98-000862
Between: Shahla Afghannawis (Applicant) and Canadian Surety Company (Insurer)
Decision on a Motion for Interim Expenses
Before: Shemin Manji Heard: April 16, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances: R. Daniel Pagowski for Mrs. Afghannawis Christopher J. Schnarr for Canadian Surety Company
Issue:
In the course of the resumption of a pre-hearing, Canadian Surety Company ("Canadian Surety") has brought a motion pursuant to section 65 of the Dispute Resolution Practice Code — Third Edition for interim expenses.
The issue on this motion is:
- Is Canadian Surety entitled to interim expenses pursuant to subsection 282(11.1) of the Insurance Act R.S.O. 1990, c.I.8, as amended?
Result:
Mrs. Afghannawis is not entitled to her expenses of Mr. Pagowski's preparation (if any) for and attendance for the resumption of the pre-hearing discussion on April 16, 1999.
Mrs. Afghannawis shall pay Canadian Surety its legal expenses, in any event of the cause, fixed in the amount of $300, inclusive of GST, for the resumptions of pre-hearing on December 17, 1998 and April 16, 1999.
Evidence and Analysis:
An arbitrator's authority to make an interim award of expenses is found in subsection 282(11.1) of the Insurance Act, which 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.
The criteria an arbitrator is required to consider when making an award of expenses are set out in Section 12 of Ontario Regulation 664, as amended by Regulation 464/96 and Rule 73 of the Dispute Resolution Practice Code. They include the "(c)onduct 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."
As I stated in Bernicky and Guardian Insurance Company of Canada,1 I am generally of the opinion that a pre-hearing arbitrator should exercise his or her discretion to award interim expenses only in restricted circumstances and that the proper time for the question of expenses to be decided is after all of the issues, evidence and arguments have been placed before an arbitrator. However, the exercise of my discretion in this case has nothing to do with the merits of this case. It has to do with the conduct of Mr. Pagowski, Mrs. Afghannawis' counsel, to date.
Specifically, I am awarding Canadian Surety interim expenses because of Mr. Pagowski's failure to be available for the resumption of the pre-hearing discussion on December 17, 1998, without a reasonable excuse.
Mr. Pagowski had ample notice of the resumption. The December 17th date was set at the pre-hearing discussion on November 4, 1998, in consultation with both counsel. After the pre-hearing discussion, Mr. Pagowski received reminders. On November 5, 1998, the Financial Services Commission of Ontario (the "Commission) sent him a Notice of Resumption of Pre-hearing Discussion confirming that the pre-hearing discussion would be resumed on Thursday, December 17, 1998 at 10:00 a.m. by teleconference. Further, on November 11, 1998, Mr. Schnarr wrote to Mr. Pagowski confirming production undertakings made by Mr. Pagowski at the pre-hearing discussion on November 4, 1998 and asking Mr. Pagowski to make all the necessary requests, including follow up, to ensure that Canadian Surety had as many productions available for the conference call on December 17, 1998 as possible. I have no reason to believe that Mr. Pagowski did not receive the Notice of Resumption of Pre-hearing Discussion from the Commission or Mr. Schnarr's letter of November 11, 1998.
When I called Mr. Pagowski on December 17, 1998 at 10:00 a.m., he advised that he was neither prepared nor available for the teleconference. He advised that he had forgotten about the resumption of the pre-hearing.
I am also exercising my discretion to award Canadian Surety interim expenses because of Mr. Pagowski's failure to comply or make reasonable efforts to comply with undertakings given by him at the pre-hearing discussion on November 4, 1998 within the time lines for production of documents set out in my pre-hearing letter to the parties of November 23, 1998.
Under cover of a letter dated August 7, 1998, Canadian Surety provided Mrs. Afghannawis with a number of authorizations for documents. At the pre-hearing discussion on November 4, 1998, Mr. Pagowski indicated a willingness to produce the documents for which authorizations were provided to Mrs. Afghannawis in August 1998. Mr. Pagowski also undertook to request a decoded OHIP summary within 30 days for a period as far back as one was available.
My pre-hearing letter required that parties, within 60 days of the pre-hearing discussion date (in this case November 4, 1998), either have complied with the undertakings given or, in the case of documents not in a party's possession, control or power, have provided proof of best efforts to comply with the undertakings.
At the resumption of the pre-hearing discussion on April 16, 1999, Mr. Pagowski confirmed that he did not request the OHIP summary until January 21, 1999, which is more than 60 days after the pre-hearing discussion of November 4, 1998. Further he advised that he did not forward the authorizations for documents to the various doctors and facilities until April 15, 1999 and April 16, 1999, the date of the resumption.
Mr. Pagowski was not able to explain the delay in requesting the OHIP summary. Further, he advised that the summary had been received by his office in early February but had not been forwarded to Canadian Surety because it had been misplaced until recently. Mr. Pagowski undertook to forward the summary to Mr. Schnarr immediately.
In respect of the authorizations, Mr. Pagowski initially advised that the reason for the delay was that Mrs. Afghannawis was not "easily contactable" — she had moved to British Columbia around Christmas time. However, he subsequently advised that since moving to British Columbia, Mrs. Afghannawis had been back for a visit earlier this year and had signed the authorizations at that time. Mr. Pagowski was not able to explain the delay in forwarding the authorizations to the various doctors from the time that the authorizations were signed to April 15 and 16, 1999.
Mr. Pagowski submitted he should not be penalized for his failure to comply with the 60 day requirement set out in my pre-hearing letter because no one was prejudiced by his failure to to so. He submitted that productions would be completed well before the arbitration scheduled for June 28 to 30, 1999. He submitted that an expenses award against Mrs. Afghannawis would not serve any purpose, but only prejudice her from bringing the matter forward.
I disagree with Mr. Pagowski. Canadian Surety may be prejudiced by his failure to comply with the time lines set out in my pre-hearing letter. There is not much time left before the hearing. Canadian Surety has requested and Mr. Pagowski has undertaken to produce a number of documents. Depending on what is contained in these documents, once received and reviewed, Canadian Surety may wish to follow-up with further requests or to seek expert opinions in response to the information contained in the documents. This will require some time. Because of Mr. Pagowski's failure to forward the authorizations for the requested medical documents and his failure to request and produce the OHIP summary in accordance with the time lines set out in my pre-hearing letter, Canadian Surety may now not have sufficient time to do this.
Further, the mandate of the Dispute Resolution Group at the Commission is "to produce the quickest, most just and least expensive resolution of the dispute." Mr. Pagowski's failure to comply with the time lines set out in my pre-hearing letter has frustrated repeated attempts by the Commission to fulfill its mandate — to facilitate meaningful settlement discussions between Canadian Surety and Mrs. Afghannawis.
The resumption of pre-hearing for the purpose of discussing settlement was scheduled three times. Mr. Pagowski was not available the first time. It was rescheduled for the second time for February 5, 1999. The resumption did not proceed that day because, on February 2, 1999, Mr. Pagowski wrote to the Commission requesting an adjournment of the resumption of pre-hearing because " ...productions necessary for a meaningful pre-hearing discussion have not been received by this office." The resumption was then rescheduled for April 16, 1999. On April 14, 1999, Mr. Pagowski again wrote to the Commission requesting an adjournment of the resumption of pre-hearing because productions requested by Canadian Surety were not completed. This time Mr. Pagowski's adjournment request was not granted and the matter proceeded. I believe that meaningful settlement discussions could not take place on that day because Canadian Surety had not received any of the requested information.
In all the circumstances I find it appropriate to firstly deny Mrs. Afghannawis her expenses of Mr. Pagowski's preparation (if any) for and his attendance, by telephone, for the resumption of the pre-hearing discussion on April 16, 1999. I find it appropriate to award Canadian Surety part of its expenses for the preparation for and attendance, by telephone, for the resumptions of pre-hearing on December 17, 1998 and April 16, 1999. Specifically, I order, pursuant to Rule 76 of the Dispute Resolution Practice Code, that Mrs. Afghannawis shall pay Canadian Surety its legal expenses for its preparation for and attendance at the resumptions of pre-hearing on December 17, 1998 and April 16, 1999, in any event of the cause, fixed in the amount of $300, inclusive of GST. This award may not be credited against any benefits to which Mrs. Afghannawis may be entitled under the Schedule.2 Although I have no authority to so order, I am of the opinion that this award should be paid personally by Mr. Pagowski.
May 27, 1999
Shemin N. Manji Arbitrator
Arbitration Order
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mrs. Afghannawis is not entitled to her expenses of Mr. Pagowski's preparation (if any) for and attendance for the resumption of the pre-hearing discussion on April 16, 1999.
Mrs. Afghannawis shall pay Canadian Surety its legal expenses, in any event of the cause, fixed in the amount of $300, inclusive of GST, for the resumptions of pre-hearing on December 17, 1998 and April 16, 1999.
May 27, 1999
Shemin N. Manji Arbitrator
Footnotes
- (OIC A-006268, July 6, 1994)
- The 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, 463/96 and 304/98.