Neutral Citation: 2001 ONFSCDRS 171

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FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ROZA KOLONJARI

Applicant

and

CUMIS GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Shari Novick

Heard:

By telephone conference call on November 13, 2001.

Appearances:

David S. Wilson for Ms Kolonjari

Robert A. Besunder for CUMIS General Insurance Company

Issues:

The Applicant, Roza Kolonjari, was injured in a motor vehicle accident on May 6, 1995. In a decision dated October 4, 2001, I dealt with her claims for statutory accident benefits under the Schedule.¹ I found that Ms. Kolonjari was entitled to payment of the outstanding chiropractic account at Prevent Assessment & Rehabilitation Clinic, and was entitled to continue to receive weekly amounts from CUMIS for housekeeping expenses and taxi transportation. I denied her claim for payment of prescription medication and ordered CUMIS to pay a special award of $5,000.

I urged the parties to resolve the issue of expenses on their own. Mr. Wilson advised by letter dated October 31, 2001 that CUMIS disputed his client's entitlement to expenses, and requested that a hearing be arranged to determine this issue. The Insurer does not seek payment of its expenses of the hearing.

The issue in this further hearing is:

Is Ms Kolonjari entitled to her expenses incurred in respect of this arbitration hearing?

Result:

Ms Kolonjari is entitled to her expenses incurred.
If the parties cannot agree on the amount of expenses to be paid, they should notify the Commission and a hearing will be convened to determine the appropriate amount.

EVIDENCE AND ANALYSIS:

The hearing of this application took five days to complete. It was hard fought and at times quite contentious. Counsel made several objections during the course of the evidence, and I was required to make many evidentiary and procedural rulings. Of the four witnesses called, two gave medical evidence and were cross-examined at length. Fortunately, the parties were content to rely on most of the medical reports filed without having to call the authors of the reports to testify.

Section 12(2) of Ontario Regulation 664, as amended by Ontario Regulation 464/96, sets out the criteria to be considered in determining an award of expenses. They are also referred to in Rule 73.2 of the Dispute Resolution Practice Code - third edition (April 15, 1997). I will set them out below:

73.2 The adjudicator will consider the criteria referred to in the Expense Regulation found in Section F of the Code. These criteria are:

(a) each party's degree of success in the outcome of the proceeding;

(b) 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;

(c) 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;

(d) the degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding;

(e) at the request of either party, any written offer to settle made in accordance with Rules 74 and 75, having regard to the outcome of the proceeding;

(f) any other matter related to the proceeding that the adjudicator considers relevant to the issue of whether an award of expenses is justified.

The Applicant was largely successful at the hearing. She was awarded three of the four medical/rehabilitation items claimed. She was not successful in her argument on the manner in which her income replacement benefits should be indexed for inflation under section 79 of the Schedule. I also found that CUMIS had unreasonably withheld payment of her prescription medication and consequently ordered that a special award of $5,000 be paid to the Applicant.

Counsel for the Insurer submits that a few factors, falling under categories (b) or (d) above, mitigate against the Applicant being awarded her expenses. Alternatively, he submits that she should not be awarded the full amount of her expenses.

Counsel pointed out that when the application for arbitration was first filed, the only outstanding issue between the parties related to the indexation of benefits. He stated that that issue had been raised by Mr. Wilson in the case of Boniface and Liberty Mutual Insurance Company,² and his arguments had not been accepted. The Insurer argued that Mr. Wilson's insistence on pursuing it again should militate against a full expense award being made in favour of his client. While the indexation issue was the only matter in dispute when the application for arbitration was first filed, the parties agreed to add the other issues addressed that had failed subsequent attempts at mediation. As noted above, the Applicant was unsuccessful on the indexation issue but largely successful on the other issues. No evidence was called by either party with respect to the indexation issue. I agree with Mr. Wilson's statement that approximately one hour was spent out of the total hearing time on submissions regarding this issue. Accordingly, I find that while this was not a novel issue, the fact that counsel chose to pursue this matter again did not prolong the hearing unduly and should not impact on the Applicant's entitlement to expenses.

The second submission made by the Insurer related to an objection made by Mr. Wilson on the first day of hearing regarding the admissibility of the Insurer's medical brief. Counsel for the Insurer claimed that much of the day was wasted discussing this matter and that the delay it caused required the parties to attend on a fifth day to complete their submissions.

Again, I find that the conduct alleged should not impact on the Applicant's entitlement to her expenses of the hearing. My hearing notes indicate that the parties spent the entire morning of the first day engaged in settlement discussions with another arbitrator, attempting to resolve this matter. The hearing then commenced at 1:30 p.m., at which time I heard detailed opening statements from both parties. Discussions were held regarding the use of surveillance evidence at the hearing, the scheduling of witnesses and Mr. Wilson's objection to the Insurer filing its medical brief. Several exhibits were marked and the hearing adjourned for the day at 4:15 p.m.

While I ultimately found Mr. Wilson's objection to the brief being filed to be without merit, I do not agree with counsel for the Insurer that much of the day was spent discussing the issue. Again, it is not a matter that in my view falls within the meaning of subsection (b) of Rule 73.2, reproduced above, and does not bear consideration in the context of determining entitlement to expenses.

I was advised that no written Offers to Settle were made in accordance with Rule 74 of the Practice Code. Accordingly, I find that the Applicant's relative success at the hearing is the key criterion to consider in this analysis, and on that basis, award her full entitlement to her expenses of the hearing.

Mr. Besunder stated that once the entitlement issue was decided, the parties would likely be able to agree on the appropriate amount of expenses to be paid. I strongly urge the parties to do so. In the event that they cannot agree on an amount, they should advise the Commission within 30 days of the date of this decision and an appropriate process will be arranged.

November 21, 2001

Shari L. Novick Arbitrator

Date