Jeffrey Blake v. Jevco Insurance Company, 2001 ONFSCDRS 57

Financial Services Commission of Ontario

Neutral Citation: 2001 ONFSCDRS 57 FSCO A98-000102

BETWEEN:

JEFFREY BLAKE Applicant

and

JEVCO INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Suesan Alves

Heard: Written submissions were filed by counsel by December 15, 2000.¹

Appearances: Robert H. Littlejohn filed written submissions for Mr. Blake Edmund Kent filed written submissions for Jevco Insurance Company

Issues:

Jeffrey Blake seeks interest on an award of expenses made on September 14, 1999. Jevco disputes that an arbitrator at the Financial Services Commission has the requisite authority to award interest on expenses. Jevco also disputes that interest is payable on an award of expenses.

The issues are:

1. Is Mr. Blake entitled to interest on an award of expenses?
2. Which party is entitled to its expenses of the motion under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8 as amended?

Result:

1. I do not have the authority to award Mr. Blake interest on an award of expenses. However, Mr. Blake may enforce the Order awarding him expenses in the Superior Court of Justice, and thereby obtain post-judgment interest.
2. Mr. Blake is entitled to his expenses of the motion, fixed at $350.

EVIDENCE AND ANALYSIS:

Background

Jeffrey Blake was injured in an accident on October 13, 1994. Jevco paid Mr. Blake statutory accident benefits under the Schedule² following the accident. Following a two day arbitration hearing, I awarded Mr. Blake his expenses on September 14, 1999. Those expenses were assessed on March 10, 2000, and, on May 2, 2000, I ordered Jevco to pay Mr. Blake $19,602.60, for his assessed expenses, including GST and expenses of the assessment, by May 20, 2000. Jevco did so on November 15, 2000.

Mr. Blake seeks interest on expenses from September 14, 1999, the date on which expenses were awarded, pursuant to section 68 of the Schedule, or, alternatively, in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended. Jevco disputes that interest is payable and submits that an arbitrator at the Financial Services Commission of Ontario does not have authority to award interest on expenses.

Authority to order interest

An arbitrator has the authority to make an award of expenses in respect of the arbitration by virtue of section 282(11) of the Insurance Act R.S.O. 1990 c.I.8, as amended. However, the Act is silent as to the authority to grant interest on expenses.

The Applicant submits that I have inherent jurisdiction to award interest on expenses. Jevco disagrees. An arbitrator only has such power as is expressly or impliedly granted by statute. Since interest is a substantive right,³ I conclude that an arbitrator at the Financial Services Commission does not have authority to grant interest on expenses.

Section 68

Section 68 of the Schedule provides:

If payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue at the rate of 2 per cent per month compounded monthly.

The Applicant submits that this section applies to an expenses award which is overdue. He relies on the dictionary definition in Webster's Encyclopedic Dictionary, that payment includes "paying for services" and "charges incurred." While these submissions address overdue payment, section 68 clearly refers to overdue payment of a benefit. I find section 68 of the Schedule obliges an insurer to pay interest on overdue benefits. I do not agree that section 68 can be interpreted in the manner suggested by the Applicant. I find no provision in the relevant Schedule for the payment of interest on expenses.

Alternate remedy

I have concluded that I have no authority to award Mr. Blake interest on his expenses. However, the legislature has made provision for post-judgment interest to accrue and be paid on an award made by an adjudicator at the Financial Services Commission of Ontario, by virtue of the provisions of section 64 of the Dispute Resolution Practice Code — Third edition, April 15, 1997 edition, section 19 of the Statutory Powers Procedure Act R.S.O. 1990, c.S.22 as amended, and sections 1.1 and 129 of the Courts of Justice Act R.S.O. 1990, c. C43, as amended.

Sections 64.1 and 64.2 of the Dispute Resolution Practice Code—Third Edition, April 15, 1997 provide that on the request of a party, the Financial Services Commission will provide a certified copy of any Order, which may then be filed in the Superior Court of Justice, for enforcement.⁴ Section 19(1) of the Statutory Powers Procedure Act R.S.O. 1990, c.S.22, as amended provides that: "A certified copy of a tribunal's decision or order in a proceeding may be filed in the Superior Court of Justice by the tribunal or a party and on filing shall be deemed to be an order of that court and is enforceable as such." Section 129(1) of the Courts of Justice Act provides that "Money owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the postjudgment interest rate, calculated from the date of the order."

In the absence of Jevco's payment of interest, Mr. Blake will need to take the above steps to enforce the Order and collect the post-judgment interest he claims.

Expenses

Each party seeks its expenses of the motion. The Applicant filed his arbitration application in January 1998, and accordingly the post-November 1, 1996 regime is applicable. After this date, section 282(11) of the Insurance Act gives an arbitrator the discretion to award expenses, to the insured person or the insurer, according to criteria prescribed by the regulations. Under the earlier regime, an arbitrator could only award expenses to the insured person.⁵ Those criteria, contained in Section12(2) of Ontario Regulation 464/96, are as follows:

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.

The criteria to be considered, the respective weight to be given to each of the criteria in the circumstances of the case, and whether to reduce, deny, or award expenses are all in the discretion of the arbitrator.⁶

I was not advised of any offers to settle. Mr. Blake was unsuccessful on the motion for interest, while Jevco was successful. In Gray and Zurich Insurance Company,⁷ Director's Delegate Draper stated that success is only one criterion in an open-ended list which must be weighed against other relevant considerations. I find the following considerations relevant.

Expenses are awarded to and belong to the Applicant. Jevco was ordered to pay Mr. Blake those expenses by May 29, 2000. It did not do so until November 15, 2000. It is difficult to fault Mr. Blake's efforts to obtain a remedy in these circumstances. I have also considered that the manner in which a person may obtain post-judgment interest on an award of expenses is not highly transparent. This was the first time that this issue was raised at the Commission in relation to this Schedule. The expenses criteria leave room for concerns about access to the dispute resolution system.⁸ One aspect of accessibility is that insured persons should have a reasonable opportunity to bring legitimate issues, particularly those of general importance, to arbitration.⁹ For these reasons, despite the Applicant's lack of success on the motion, I exercise my discretion to award him expenses of the motion, fixed at $350.

April 12, 2001

Suesan Alves Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 57 FSCO A98-000102

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JEFFREY BLAKE Applicant

and

JEVCO INSURANCE COMPANY Insurer

ARBITRATION ORDER

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

1. Mr. Blake's claim for interest on expenses is dismissed, as an arbitrator does not have the authority to make such an award. However, Mr. Blake may enforce the Order awarding him expenses in the Superior Court of Justice, and thereby obtain post-judgment interest.
2. Jevco Insurance Company shall pay Mr. Blake his expenses of this motion, fixed at $350.

April 12, 2001

Suesan Alves Arbitrator

Date

Footnotes

1. 1On December 15, 2000, Mr. Littlejohn also withdrew as counsel for the Applicant. Mr. Blake wrote advising that he wished to retain new counsel. Subsequently, Mr. Blake and counsel for the Insurer both confirmed with the Commission that they did not wish to make oral submissions by January 15, 2001.
2. 2The 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. O.R. 776/93 was extensively modified by O.R. 781/94; accordingly, where necessary, "1994 Schedule "refers to the original O.R. 776/93, and "1995 Schedule "refers to O.R. 776/93 as amended.
3. 3Re Northern and Central Gas Corp. Ltd. and Kidd Creek Mines Ltd. 1988 CanLII 4649 (ON CA), [1988], 66 O.R. (2d) 11(Ont. C.A.) and Ontario Ministry of Transportation v. Tripp 1999 CanLII 3762 (ON CA), [1999], O.J. No. 2832 (Ont. C. A.)
4. 4The Code states that the Order shall be filed in the Ontario Court (General Division). Under section 1.1(1) of the Courts of Justice Act, a reference in a rule to the Ontario Court (General Division) shall be deemed, unless a contrary intention appears, to be a reference to the Superior Court of Justice. Section 64.3 of the Code requires a party who files an order for enforcement to notify the Commission that it has done so within 10 days after the filing.
5. 5Henriques and Motor Vehicle Accident Claims Fund (OIC P97-00002 August 21, 1997)
6. 6Gray and Zurich Insurance Company (FSCO A91-001660 January 29, 1999)
7. 7(FSCO P98-00041 June 11, 1999)
8. 8Gray, op.cit.
9. 9Gray, op.cit.; Allison and Markel Insurance Company of Canada (FSCO P-001231 August 21, 1996)