Neutral Citation: 2001 ONFSCDRS 22

FSCO A98-001306

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RAYMOND BUDD

Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before:

Kaye Joachim

Heard:

January 7, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received on January 7, 2001.

Appearances:

Rita Bambers for Mr. Budd

Leonard Hochberg for Personal Insurance Company of Canada

Issues:

The Applicant, Raymond Budd, was injured in a motor vehicle accident on March 19, 1997. He applied for and received statutory accident benefits from Personal Insurance Company of Canada ("Personal") under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Budd applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

By decision dated June 21, 1999, I made the following orders:

The Insurer is not required to pay Mr. Budd income replacement, non-earner or section 20, 21, or 22 benefits because he knew or ought reasonably to have known that he was operating the 1991 Honda Civic while it was not insured.
Mr. Budd is required to repay the Insurer $6,357.02 in income replacement benefits.
Mr. Budd is not required to repay section 20, 21, or 22 benefits.

By decision dated January 8, 2000, Director's Delegate McMahon dismissed Mr. Budd's appeal of my decision.

Both the Insurer and the Applicant seek expenses in respect of the arbitration proceeding. The issues are:

Is Personal entitled to its expenses of the arbitration proceeding?
Is Mr. Budd entitled to his expenses of the arbitration proceeding?

Result:

Personal is entitled to expenses in the amount of $2,712.50, plus $59 in disbursements.
Mr. Budd is not entitled to his expenses of the arbitration proceeding.

EVIDENCE AND ANALYSIS:

I have reviewed the expense submissions of Personal dated October 10, 2000 and the submissions of Mr. Budd dated December 8, 2000.

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

Each party's degree of success in the outcome of the proceeding.
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.
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.
The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
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.
Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

I am satisfied that Personal is entitled to its reasonable expenses of the arbitration and Mr. Budd is not entitled to his expenses of the arbitration, for the following reasons:

The central issue in dispute in the arbitration was whether Mr. Budd knew or ought reasonably to have known that he was operating the 1991 Honda Civic while it was not insured. I found as a fact that Mr. Budd knew that his wife had canceled the insurance on this vehicle effective March 14, 1997 and that at the time of the accident of March 19, 1997, he knew he was operating the vehicle without insurance. In making this finding of fact, I specifically rejected Mr. Budd's evidence that he did not know. Further, I made several findings adverse to his credibility. In light of my findings, I can only conclude that Mr. Budd's evidence at the hearing on this point was not truthful. In my view, his position on this point was fraudulent.

While his alternative positions with respect to repayment and estoppel were not without merit, he was largely unsuccessful in resisting Personal's claim for repayment. Further, the bulk of the hearing was devoted to the primary issue described above.

I conclude that this is an appropriate case to deny Mr. Budd his expenses and award Personal its reasonable expenses.

Amount of Expenses:

Personal claimed $59 worth of disbursements, which was not disputed. This amount is payable.

Personal also claimed 37.5 hours for counsel's time at the rate of $80 per hour. The base hourly rate payable for a lawyer appearing before a judicial or quasi-judicial proceeding is $67.² An experience allowance of 12.5 percent is allowed for a lawyer who has the equivalent of four years of practice in civil litigation.³ Personal's counsel claims this experience allowance, which results in an hourly rate of approximately $75. Mr. Budd did not dispute the reasonableness of the hours claimed, and I find that the time claimed is reasonable in the circumstances. Therefore, Personal is entitled to counsel fees in the amount of $2,712.50, plus $59 in disbursements.

Interest:

Personal made a claim for interest on the sum of $6,357.02 which I ordered repaid in my initial decision of June 21, 1999. In that decision I did not award interest. If Personal believed I erred in failing to award interest, the proper forum to address that issue was on appeal. I no longer have the jurisdiction to address that issue.

February 16, 2001

M. Kaye Joachim

Arbitrator

Date