Neutral Citation: 2001 ONFSCDRS 68
FSCO A00-000628
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
HABIB NADEM
Applicant
and
COSECO INSURANCE CO./HB GROUP/DIRECT PROTECT
Insurer
DECISION ON A MOTION FOR INTERIM EXPENSES
Before:
Joyce Miller
Heard:
May 4, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Stanley B. Pasternak for Mr. Nadem
Theodore P. Charney for Coseco Insurance Co./HB Group/Direct Protect
Issues:
The Applicant, Habib Nadem, was injured in a motor vehicle accident on October 9, 1999. He applied for statutory accident benefits from Coseco Insurance Co./HB Group/Direct Protect ("Coseco"), payable under the Schedule.1 Mr. Nadem's entitlement to income replacement benefits was acknowledged by Coseco, however, the amount of the income replacement benefit was in dispute. The parties were unable to resolve their dispute through mediation, and Mr. Nadem applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Mr. Nadem has brought a motion pursuant to Rule 65 of the Dispute Resolution Practice Code — Third Edition for interim expenses to be paid to him pending the resolution of his dispute with Coseco.
The issue on this motion is:
- Is Mr. Nadem entitled to interim expenses pursuant to subsection 281(11.1) of the Insurance Act?
Result:
- Mr. Nadem is not entitled to interim expenses.
Any claim for expenses of this motion will be left to the hearing arbitrator.
EVIDENCE AND ANALYSIS:
Mr. Nadem was injured in a car accident on October 9, 1999. At the time of the accident Mr. Nadem was a self-employed owner of a restaurant, Shah Dining Lounge. Mr. Nadem had purchased the restaurant approximately eight months before the car accident. Prior to that for many years he had worked as a chef.
Although Coseco acknowledges that Mr. Nadem is entitled to a weekly income replacement benefit, it has refused to pay him an income replacement benefit because it has not been able to assess the quantum of the benefit.
Shortly after Mr. Nadem applied for accident benefits Coseco retained the services of the accounting firm of PriceWaterhouseCoopers to determine the amount of Mr. Nadem's income replacement benefit. Based on the information that Coseco was provided PriceWaterhouseCoopers determined that Mr. Nadem's weekly income replacement benefit up to December 31, 1999 was $5.03, and from Januray 1, 2000 to April 30, 2000 it was $7.17.
Mr. Nadem disputed the amount and filed for mediation. At mediation Coseco made an advance payment of $6,000 to Mr. Nadem on a "without prejudice" basis. The parties agreed to continue working on arriving at an amount for the income replacement benefit. To this end arrangements were made for Mr. Nadem's accountant, Mr. Davoud Kargar of Amin Accounting, to meet with representatives of PriceWaterhouseCoopers to examine Mr. Kargar's documentation regarding Mr. Nadem's wages. Coseco agreed to pay Mr. Kargar $100 an hour for his time.
The meeting did not assist in resolving the issue of quantum. The parties are now proceeding to arbitration on June 18, 2001.
Mr. Nadem has brought a motion for interim expenses of $2,500 plus GST to pay Mr. Kargar for his past services, as well as an additional amount of $2,500 plus GST for Mr. Kargar to prepare a financial statement to assist in proving his case at the arbitration.
Submissions:
Mr. Nadem's Submissions
Mr. Nadem submits that he suffered a serious injury in the car accident and has not been able to work. As a result, his business which was beginning to flourish prior to accident has been operating at a loss. Mr. Nadem submits that since the car accident he has been completely without any source of income. He has been forced to live with his mother and sisters and is dependent upon them for his support. He has had to borrow a considerable amount of money from his girlfriend to keep his restaurant open and she is now demanding that he repay her the money.
Mr. Nadem submits that in order to properly prepare for arbitration it is necessary for his accountant to calculate the post-accident losses from self-employment and to prepare a financial statement for the period February 1, 2000 to the present. Mr. Nadem submits that his accountant has refused to provide him with any further accounting services until his bill for past services has been paid.
Mr. Nadem submits that he has no money to fund the accounting expenses necessary to prove his case at arbitration. Mr. Nadem submits that the legislation allows for an award of interim expenses and that the case law2 has held that interim expenses, in certain circumstances, should be allowed "to facilitate applicants' access to the adjudication of legitimate disputes."
Mr. Nadem submits that Coseco has never disputed his entitlement to income replacement benefits. Mr. Nadem submits that the issue of quantum is a legitimate issue for arbitration and, accordingly, he requests that he be awarded interim expenses in the amount of $5,350 for the services of his accountant.