Neutral Citation: 2001 ONFSCDRS 117

FSCO A98-000839

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MANMOHAN SAKHUJA

Applicant

and

MARKEL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before:

Tanja Wacyk

Heard:

Written submissions received on June 19, 2001 on behalf of Markel Insurance Company of Canada

Appearances:

No One for Mr. Sakhuja

Jeffrey A. Gauze for Markel Insurance Company of Canada

Issue:

The Applicant, Manmohan Sakhuja, was injured in a motor vehicle accident on April 30, 1994 and sought benefits payable under the Schedule.¹

In a decision dated September 6, 2000, I determined two preliminary issues regarding Mr. Sakhuja's claim for statutory accident benefits under the Schedule. I made the following orders:

Mr. Sakhuja is precluded, pursuant to subsection 71.1(a), from proceeding to arbitration because he has failed to submit an Application for Benefits within 90 days of receiving the application forms, as required by subsection 59(3) of the Schedule.
Mr. Sakhuja is also precluded from proceeding to arbitration because his Application for Arbitration was filed beyond the limitation periods set out in subsection 281(5) of the Act, and section 72 of the Schedule.
Markel is not entitled to an award in the amount of its assessment pursuant to subsection 282(11.2) of the Act, as amended.
Mr. Sakhuja is liable to pay Markel's expenses in respect of the arbitration under section 282(11) of the Act, although the determination of the quantum is deferred.

The remaining issue is:

What is the quantum of expenses Markel is entitled to?

Result:

Markel's expenses of the arbitration proceeding are assessed at $2,332.54, plus $163.27 GST, plus disbursements of $160.68, for a total of $2,656.49.

Background:

The history of this proceeding is set out in my earlier decision.

On October 5, 2000, the Insurer wrote to me, enclosing its Bill of Costs, and requesting that I issue an order regarding the Insurer's expenses. Mr. Sakhuja was copied on this correspondence.

By letter dated December 7, 2000, the Case Administrator wrote independently to Mr. Sakhuja, referring to the Insurer's correspondence of October 5, 2000. She provided him with a copy of the Commission's procedure for an assessment of expenses, indicating he could file a request for an assessment of expenses with the Registrar's Office. No response was received.

On June 19, 2001, further correspondence was received from Markel's counsel requesting both a decision regarding the quantum of expenses to which Markel is entitled, and that the determination be made without an oral hearing.

A copy of this material was sent to Mr. Sakhuja, and he was asked to respond by July 16, 2001. Again, no response was received.

In light of Mr. Sakhuja's failure to respond either to the Bill of Costs submitted to him by Markel or to the Commission’s request for submissions on this matter, I conclude that Mr. Sakhuja has had ample opportunity to make submissions on the matter of expenses and nothing would be gained by requiring an oral hearing to determine this matter.

Criteria:

Subsection 12(2) of Ontario Regulation 664 sets out the criteria for an arbitrator’s consideration of an order of expenses. In particular, the arbitrator may consider each party’s degree of success in the outcome of the proceeding, any conduct of a party that "...tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders," and whether the proceeding was "...manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process."

Section 3 of Ontario Regulations 664² provides the following:

(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:

For all services performed before an arbitration, appeal variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.

(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.

(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or Financial Services Commission of Ontario, as it may be amended from time to time.

Rule 76.1 of the Dispute Resolution Practice Code (Third Edition, April 15, 1997) provides that:

The maximum amount that may be awarded to an insured person or an insurer for legal fees is an amount calculated using:

(a) the hourly rates established under the Legal Aid Act for professional services in civil matters before the Ontario Court (General Division); or

(b) the hourly rate referred to in Rule 76.1(a) adjusted to include, where appropriate, the experience allowance established under the Legal Aid Act.

Arbitration decisions have also held that the overriding consideration for an arbitrator in fixing expenses is the reasonableness of the expenses claimed.³

It has also been held that⁴ "rather than a 'line by line' enquiry into [a] claim for expenses, arbitrators should fix a reasonable ballpark figure based on all the circumstances, including the dockets submitted, and the length and complexity of the hearing."

Analysis:

The Bill of Costs submitted by Markel, totalling $2,656.49, is set out in Appendix A. This total includes: Solictors' Fees of $2,332.54; $163.27 GST; and disbursements of $160.68.

Markel also indicated that the current rates as set by the Ontario Legal Aid Plan had been used to establish the hourly billing rates set out in the Bill of Costs.

The Bill of Costs reflects the involvement of four counsel over the three years it took this matter to reach its conclusion. It also reflects the number of times counsel were required to prepare for and attend and re-attend pre-hearings and the preliminary issues hearing because of the actions of Mr. Sakhunja.⁵ Taken as a whole, and considering the complexity of the preliminary issues, the amount claimed appears reasonable and will be allowed.

Determination:

Markel's expenses of the arbitration proceeding, to which I have already determined the Insurer is entitled, are assessed at $2,332.54, plus $163.27 GST, plus disbursements of $160.68, for a total of $2,656.49.

August 10, 2001

Tanja Wacyk Arbitrator

Date