Jose M. DaCosta v. Dominion of Canada General Insurance Company, 2002 ONFSCDRS 108

Neutral Citation: 2002 ONFSCDRS 108

FSCO A00-000214

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JOSE M. DACOSTA

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Joyce Miller

Heard:

Written submissions received by February 8, 2002.

Appearances:

Rene A. Clonfero for Mr. DaCosta

Joan Takahashi for Dominion of Canada General Insurance Company

Issues:

The Applicant, Jose M. DaCosta, was injured in a motor vehicle accident on April 25, 1997.

In a decision dated May 28, 2001, I dealt with his claims for statutory accident benefits under the Schedule.¹ I made the following finding, while reserving on the issue of expenses:

1. Pursuant to section 4 of the Schedule Mr. DaCosta was not employed at the time of the accident.

The issue in this further hearing is:

2. Is either Mr. DaCosta or Dominion entitled to their expenses incurred in respect of this preliminary issue arbitration hearing?

Result:

1. Mr. DaCosta is entitled to his expenses incurred in respect of this arbitration proceeding fixed in the amount of $10,261.22, plus applicable GST, less $53 if the cheque to Ms. Danilko was not cashed.

The Law

Subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, provides:

The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Subsection 12(2) of the Expense Regulation² provides:

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

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.

ANALYSIS AND FINDINGS :

The case law is clear, awarding expenses at arbitration is not based on the results approach of the courts, but is based in significant measure on the underlying purpose of the statutory accident benefit scheme, namely, to facilitate access to a relatively inexpensive, speedy and informal adjudication of disputes.³ The degree of success in the outcome of an arbitration proceeding isonly one of a number of criteria that an arbitrator takes into consideration when exercising his or her discretion to award expenses to a party.

Applying the criteria outlined above, for the following reasons I find that Mr. DaCosta is entitled to his expenses in this arbitration proceeding.

I. Expenses for Hearing on January 30, 2001

On September 28, 2000 counsel for Dominion, Ms. J. Takahashi, wrote to FSCO requesting an adjournment of the preliminary issue hearing scheduled to take place on October 10 and 11, 2000. The preliminary issue to be decided was whether Mr. DaCosta was employed at the time of his car accident. The adjournment was requested on consent because certain productions regarding Mr. DaCosta's employment had not yet been obtained.

On October 4, 2000 an adjournment was granted peremptory to both parties and was rescheduled for January 30 and 31, 2001.

On January 22, 2001 Ms. Takahashi wrote to FSCO requesting an adjournment alleging that Mr. DaCosta failed to "produce crucial documentation which is relevant to the issues in the hearing." [emphasis added]

Dominion's request for an adjournment was denied on January 25, 2001. Arbitrator Allen noted in her letter of January 26, 2001 that Dominion was requesting the adjournment to ascertain that the complete clinical notes and records from Mr. DaCosta's family doctor and handwritten notes from a treating orthopaedic surgeon had been made available by the respective doctors. She also noted that Mr. DaCosta submitted that the complete medical documents from both doctors had been produced by the doctors and forwarded to Dominion. As well, she noted that Mr. DaCosta agreed to provide authorizations before the hearing permitting Dominion's counsel to inquire as to whether the complete notes and records of the respective doctors had been produced.

On January 28, 2001, Mr. DaCosta's counsel, Mr. R. Clonfero, wrote to Ms. Takahashi stating the following at paragraph 11:

Arbitrator Allen also advised at the conclusion of the adjournment hearing that if the insurer intends to raise issue with respect to the production issues that were the subject of this adjournment hearing that you should advise me in advance of the Preliminary Issues Hearing so that I may have opportunity to prepare a response and to have my Law Clerk present at the Preliminary Issues Hearing to give evidence about his knowledge, information and belief with respect to the production of the documents which the insurer alleges it does not have - please provide me with your position on this no later than Monday, January 29^th. [emphasis added]

At the start of the hearing on January 30, 2001, Ms. Takahashi, without having first advised Mr. Clonfero, requested an adjournment on the basis that there were certain clinical notes and records missing that were relevant to the issue of whether Mr. DaCosta was an employed person at the time of the motor vehicle accident. The adjournment was granted.

In her letter dated January 31, 2001, she stated that, "There is no suggestion that Mr. DaCosta has not requested or has held back records." She also noted that the arbitrator who ultimately hears this matter may consider the adjournment request in the context of any award of expenses made.

A. Mr. DaCosta's Submissions

Mr. DaCosta submitted that Dominion's representative acted in ways which resulted in prejudice to him. Mr. DaCosta submitted that Dominion unnecessarily and unreasonably delayed the proceedings. It did so by failing to adduce any evidence in support of its allegations for non-disclosure of records, by failing to demonstrate that the records it alleged had not been disclosed were even relevant to the issue in the preliminary issue hearing and by breaching the "informal" order of Arbitrator Allen that Dominion's representative notify Mr. DaCosta's counsel in advance of the January 30, 2001 hearing date if Dominion intended to seek a further adjournment at that time.

Mr. DaCosta submitted that Dominion's adjournment request at the hearing on January 30, 2001 was based on the same premise as the adjournment request that was denied by Arbitrator Allen on January 25, 2001, namely, the alleged non-production of the records of Dr. Dunphy and Dr. Salo. Mr. DaCosta submitted that the medical records of both these doctors had been provided to Dominion. Mr. DaCosta submitted that Dominion had failed to adduce any evidence in support of its allegations of missing records of Dr. Dunphy or that the handwritten notes of Dr. Salo would disclose anything that was not disclosed in his transcribed notes made contemporaneously with Mr. DaCosta's attendances with Dr. Salo both before and after the car accident

Mr. DaCosta submitted that at the January 30, 2001 hearing he became "confused and dismayed" at the allegations made by Dominion's representative regarding the non-production of medical records and what he perceived to be an unfair procedural delay.

B. Dominion's Submissions

Dominion presented written submissions which included material that was not relevant to the issue. For example, Dominion went on for a great length on a matter — the calling of witnesses — which was not the subject of the January 30, 2001 adjournment request. I summarize only its submissions relevant to the production issue for medical documentation in respect of the January 30, 2001 adjournment request.

Dominion submitted that Mr. DaCosta's submission that he had provided Dominion with the complete disclosure of medical documentation pertaining to Mr. DaCosta pre-dating the motor vehicle accident in April 1997 "was not the case." Dominion referred to the following four items, (that were not the subject of the adjournment request) as examples of Mr. DaCosta not having provided complete pre-accident medical records:

• Dr. Dunphy's clinical notes and records contained a six year gap between February 1991 and April 3, 1997;

• The clinical notes and records of Dr. Melvin, the cardiologist, were incomplete in that Mr. Clonfero had only sent two pages, even though the second page stated page 1 of 21;

• The clinical notes and records of Dr. Masgoret, pre-accident were not received;

• Dominion only received a three page report from Dr. D. Silveira, a psychiatrist, with no handwritten notes or other records in respect of treatment rendered.

C. Mr. DaCosta's Reply Submissions

Mr. DaCosta submitted that not all medical documentation relating to him was relevant to the preliminary issue. Mr. DaCosta submitted that the four items noted above in Dominion's submission were not related to pre-accident medical records. Mr. DaCosta responded to these items as follows:

• The reason there was a six year gap in Dr. Dunphy's medical records between February 1991 and April 1997 is because Dr. Dunphy had not rendered any medical services to Mr. DaCosta during this period of time. This fact is established in the decoded O.H.I.P. summary which was delivered to Ms. Takahashi by November, 2000;

• The cardiologist, Dr. Melvin, did not attend to Mr. DaCosta until November 1998. This is confirmed in the decoded O.H.I.P. summary. Ms. Takahashi has the complete copies of his records;

• Dr. Masgoret became Mr. DaCosta's family doctor after Dr. Dunphy retired in October 1998. The decoded O.H.I.P. summary confirms this; and,

• Dr. Silveira, the psychiatrist, did not have a consultation or begin to treat Mr. DaCosta until early 1999. This is confirmed in the O.H.I.P. summary.

I. Findings

For the following reasons I award Mr. DaCosta his expenses with respect to the adjournment of the hearing on January 30, 2001.

I find that the medical documents that Dominion was allegedly seeking were not relevant to the preliminary issue as to whether Mr. DaCosta was employed at the time of the accident. I find that it is more likely than not that Dominion was aware of this when it requested the adjournment.

Dominion submits that it "was forced"⁴ to make the adjournment request. However, I note that its representative did not advise Mr. Clonfero in advance that Dominion would be requesting this last-minute adjournment, after having been advised to do so by Arbitrator Allen, thus not giving him an opportunity to prepare a response which could have prevented the adjournment. I can only conclude that this was a tactic on the part of Ms. Takahashi to catch Mr. Clonfero by surprise.

Moreover, I find that if the medical evidence was as critical to Dominion's case as Ms. Takahashi claimed it was on January 30, 2001, Ms. Takahashi gave no indication of this at the hearing on February 26, 2001. In fact, I was left with the impression that Ms. Takahashi had actually forgotten the reason why she had asked for the adjournment.

At the commencement of the hearing before me on February 26, 2001 Mr. Clonfero introduced as an exhibit the medical brief which had been the subject of the adjournment on January 30, 2001. Ms. Takahashi questioned the introduction of this medical brief stating she did not understand why it was being produced.⁵ In response to my question as to whether the evidence was relevant, Mr. Clonfero stated that he would not be relying on the evidence. Ms. Takahashi responded: "I'm assuming we're not going to need it for the purposes of today.⁶ " In fact, the medical evidence presented was neither "crucial" or "relevant" to the preliminary issue of whether Mr. DaCosta was employed at the time of the accident.

For these reasons I find that Dominion, for its own purposes, wanted an adjournment on January 30, 2001 and persuaded the Arbitrator that the medical evidence was critical to its case. I find there was in fact no relevant or credible basis for Dominion's adjournment request. Accordingly, pursuant to the Expense Regulation, I find that Dominion's request for an adjournment on January 30, 2001 not only prolonged the proceeding, but was manifestly unfounded.

Accordingly, I find that Mr. DaCosta is entitled to his expenses incurred as a result of the January 30, 2001 adjournment.

II. Expenses for Preliminary Issue Hearing on February 26 and 27, 2001

A. Mr. DaCosta's Submissions

Mr. DaCosta submitted that at the hearing held on February 26 and 27, 2001 Dominion's representative called evidence on issues which were not in dispute and conducted a cross-examination of him which was largely unnecessary and which was conducted with a "somewhat less than courteous approach."

Mr. DaCosta submitted that the threshold issue for the preliminary issue hearing was very straightforward, namely, whether Mr. DaCosta was employed at the time of the accident. Mr. DaCosta submitted that, nevertheless, Dominion's representative unnecessarily made credibility an issue and engaged in an extensive cross-examination of himself on his Affidavit which failed to elicit any information which altered the knowledge, information and belief which he deposed in his Affidavit.

Mr. DaCosta submitted that Dominion's representative called witnesses who gave no evidence beyond what was contained in their Affidavit or business records in spite of Dominion's representative's insistence that Dominion's witnesses be called and give oral evidence which it said was critical to the threshold issue.

Mr. DaCosta submitted that the hearing could have been completed within "a couple of hours." Mr. DaCosta submitted that the record shows that the positions and submissions at the hearing by Dominion's representative served to unduly prolong the hearing.

Mr. DaCosta submitted that he participated in the proceeding in such a way that helped the tribunal to understand the issues before it by providing an Affidavit of his evidence as well as all supporting materials in advance of the proceeding.

Mr. DaCosta submitted that he participated in the proceeding in a responsible, informed and well prepared manner and contributed to a shorter, more efficient and more effective hearing.

B. Dominion's Submissions

Regarding Mr. DaCosta's submission that Dominion's cross-examination of him was irrelevant, Dominion responded as follows:

Mr. Clonfero also states in his written submissions that Mr. DaCosta was cross-examined at the hearing, which cross-examination failed to elicit any information which altered the knowledge, information and belief deposed to in his Affidavit. In his Affidavit, Mr. DaCosta states that he was originally hired by Torbridge Construction in 1995 through his friend, Tony Carrera, who arranged for him to meet with the representative of Torbridge Construction. He further deposed that "I sincerely understood that my employment contract to be one of indefinite duration. I sincerely held this belief throughout the time of my employment with Torbridge Construction for so long as there was work available", but did not provide the source of his understanding and belief. During his examination-in-chief, Mr. DaCosta testified that when he started employment with Torbridge, he was never told how long he would be working. ... During his cross-examination, Mr. DaCosta testified that his friend, Tony Correia [sic], arranged for him to meet with "Moses" of Torbridge Construction. Mr. DaCosta was unable to advise whether "Moses" was his first or last name. Mr. DaCosta further testified that he did not receive any written offer of employment from Torbridge Construction in April 1995. ... There is no doubt that communications between Mr. DaCosta and Torbridge with respect to the length or type of employment for which Mr. DaCosta was being hired were crucial to the issue of Mr. DaCosta's employment status.

Dominion of Canada was entitled to and rightly asked for an opportunity to explore the basis upon which Mr. DaCosta held the belief that his contract of employment was of "indefinite duration".

During his cross-examination, Mr. DaCosta also provided testimony with respect to the completion of the Application for Accident Benefits, in particular, that the "unemployed" box was checked off in the Application. ... There was no reference to such information in Mr. DaCosta's Affidavit, which information was undoubtedly significant in considering Mr. DaCosta's employment status at the time of the accident. This information is particularly relevant to Mr. DaCosta's claim that his employment contract was of indefinite duration. It was felt that the fact that Mr. DaCosta appeared to understand that he was unemployed when he completed the Accident Benefit Application was a point which would have been of interest to the Hearing Arbitrator.

Regarding Mr. DaCosta's submission that Dominion called witnesses who gave no evidence beyond what was contained in their Affidavit or business records, Dominion responded as follows:

An even more compelling reason why Dominion felt that the attendance of its witnesses, especially Mr. Giardino, were essential to the Preliminary Issues Hearing, is the possibility of the Applicant raising the argument that he was entitled to Income Replacement Benefits pursuant to section 4.2(ii) of the Schedule; namely, that he was "employed" for at least 26 weeks during the 52 weeks before the accident. Mr. DaCosta had worked for Torbridge Construction from April 22, 1996 to July 12, 1996, when he sustained a work-related injury and was unable to return to work. Although by that point, Mr. DaCosta had only worked approximately 11 weeks out of the 52 weeks before the accident, Mr. DaCosta's name showed up on the Torbridge Construction payroll records for several months thereafter. Accordingly, the Applicant could have argued that he was considered to be "employed" by Torbridge until December 1996, when his name was removed from the payroll records.

Dominion did not know and would not have known until the Preliminary Issues Hearing proceeded whether Mr. Clonfero would raise this argument on behalf of his client. If this argument had been raised, the oral evidence of Mr. Giardino would have been crucial in explaining why Mr. DaCosta's name appeared on the payroll records long after he stopped working for Torbridge on July 12, 1996. Even if this argument had not been raised by Mr. Clonero, there was always a possibility that the Hearing Arbitrator would have considered this argument in determining whether Mr. DaCosta was "employed" pursuant to the Schedule. In the circumstances, Dominion had no choice but to call Mr. Giardino as a witness for the Preliminary Issues Hearing to be prepared to fully defend against Mr. DaCosta's claim. While Mr. Clonfero had not raised this point, prior to the commencement of the Hearing, it was our belief that this Board would have been prepared to hear argument even if raised at the last minute.

C. Mr. DaCosta's Reply Submissions

Mr. DaCosta submitted that "Dominion's assertion that the even more compelling reason to have its witnesses attend the hearing ... is the possibility that the applicant might raise arguments for entitlement to IRB's beyond what was contained in the Applicant's Affidavit, Application Record, Factum, and Brief of Authorities is not borne out by the facts or the evidence." [emphasis in original]

D. Findings

For the following reasons I find that Dominion's conduct with respect to the hearing on February 26 and 27, 2001 unnecessarily prolonged the proceeding.

First, I would like to comment on the manner and tone of Dominion's counsel's conduct at the hearing. As noted above, Mr. DaCosta submitted that Ms. Takahashi conducted her cross-examination of him in a "somewhat less than courteous approach." The transcript of the hearing confirms this and clearly reveals that Ms. Takahashi conducted herself in an unnecessarily adversarial manner.⁷

For example, in cross-examining Mr. DaCosta, if he did not give the answer she wanted, despite the fact that it was an honest and not vague response,⁸ Ms. Takahashi insisted on repeating the question a number of times in an aggressive and sarcastic tone.⁹ In my view, this hostile repetition of questions¹⁰ clearly added to the prolongation of the hearing.

I warned Ms. Takahashi a number of times during the course of the proceeding to be more concise and to the point in her examination otherwise I would penalize Dominion in its expenses.¹¹ My warnings, however, had no effect in changing Ms. Takahashi 's manner of conducting the case.

Along with this very negative, aggressive tone I also agree with Mr. DaCosta's submission that Ms. Takahashi conducted herself in a manner which served to unduly prolong the proceedings. I cite four examples.

1. Unnecessary examination of witnesses

At the commencement of the hearing Mr. DaCosta submitted that he wished to rest his case on his Affidavit. On that basis the hearing could have been easily concluded in a half day. However, Ms. Takahashi, along with persisting in an unnecessarily lengthy cross-examination of Mr. DaCosta, insisted on examining two witnesses, Mr. Carmen Giardino, Mr. DaCosta's former employer, and Ms. Susen Abraham, an occupational therapist. Their testimonies, however, did not provide any further relevant evidence on the issue in dispute that was not already in the Affidavit and reports that were presented by Dominion.¹²

At the hearing Ms. Takahashi submitted that her examination of Mr. Giardino was crucial and important, and would provide new information that was not in his Affidavit.¹³ However, I agree with Mr. DaCosta's submission that Ms. Takahashi's examination of Mr. Giardino was irrelevant.

While Mr. Giardino may have provided some information not in his Affidavit, such as the name of an employee, it was neither important nor crucial to the issue in dispute. Ms. Takahashi 's examination of Mr. Giradino primarily focussed on repeating what was in his Affidavit.¹⁴ This was done despite the fact that Ms. Takahashi was told that a repetition of his Affidavit was not necessary.

If anything positive came out of Mr. Giardino's testimony, it was to confirm Mr. DaCosta's credibility. I make this latter point because Ms. Takahashi spent a good deal of time cross-examining Mr. DaCosta with the intention of impugning his credibility based on his statement in his Affidavit "I sincerely understood that my employment contract to be one of indefinite duration. I sincerely held this belief throughout the time of my employment with Torbridge Construction for so long as there was work available." [emphasis added]

Mr. Giardino, under cross-examination, confirmed Mr. DaCosta's belief that he would have continued to work at his job so long as work was available, thus supporting Mr. DaCosta's testimony.¹⁵ This is but one example where I found that Ms. Takahashi's attack on Mr. DaCosta's credibility was not justifiable and merely prolonged the proceedings.

In addition, I find that Ms. Takahashi tried to prolong the proceedings by insisting that I deal with an issue that did not exist; insisting that I accept her written submissions when it was not required; and requiring a separate expense hearing when it was not reasonable in the circumstances.

2. An issue that did not exist

Mr. DaCosta's submission that Dominion's representative adopted positions and submissions that served to unduly prolong the hearing is illustrated in the following example. Pages 267 to 286 of the transcript records a rather lengthy, bizarre exchange where Ms. Takahashi kept insisting that an issue regarding non-earner benefits, which was never mediated,¹⁶ and which Mr. DaCosta stated that he had no intention of pursuing,¹⁷ be heard as a preliminary issue on the basis that Mr. DaCosta was out of time to make this claim.

I think it is instructive to quote a small portion from the transcript¹⁸ which typifies the discussion on this issue:

Mr. Clonfero:

. . . Mr. DaCosta, I can assure you, has not - - never made any formal application for non-earner benefits. There's no issue about that. We're not contending that whatsoever. Application can take different meanings. I did not intend it to mean a written or formal application. Obviously there is none.

Ms. Takahashi:

The position of Dominion is that non-earner benefits were denied and Mr. Clonfero takes the position that the refusal to pay non-earner benefits, is in effect an - - -

The Arbitrator:

I just heard that he never applied for it. So how can it be denied? I don't understand what 's going on.

Ms. Takahashi:

Well, that 's what Ms. Lagana's evidence is all about.

The Arbitrator:

That he applied and it was denied?

Ms. Takahashi:

Yes.

The Arbitrator:

Do you have a document that he's applied?

Ms. Takahashi:

No, I don't. That's precisely. I do not have a document to that effect. What I have is Ms. Lagana's evidence on the procedures and approach that 's taken by Dominion of Canada in respect of considering this issue. [emphasis added]

The Arbitrator:

. . . Is he applying for this benefit, yes or no?

Mr. Clonfero:

He has not yet applied.

The Arbitrator:

A person has just said he hasn't applied, he's not making an application for it. And you're saying that he has applied, you have no written proof and he's been denied, [emphasis added]

Ms. Takahashi:

Yes, absolutely.

The Arbitrator:

. . . This is not a mediated issue. This is not a failed issue. Is there a mediator's report and application for it as failed?

Ms. Takahashi:

Yes.

Page 282 of the transcript records Ms. Takahashi reading from the pre-hearing letter the following statements: "The issue of non-earner benefits in addition to med rehab, although in dispute, were not added as issues in the proceedings at this time as they had not been mediated." "I may be contacted for a resumption of this pre-hearing discussion, should the parties wish to amend the issues proceeding to the arbitration." [emphasis added]

There was no evidence presented that a resumption of the pre-hearing to deal with this matter had occurred. Despite this and without providing any objective evidence to support her position, Ms. Takahashi stated at page 282 of the transcript that this issue was "added on consent."

Mr. Clonfero denied that this issue was added on consent. Mr. Clonfero stated that the issue regarding a non-earner benefit was only included in the pre-hearing letter because "Ms. Takahashi wished it to be."¹⁹

Throughout the lengthy discussion Ms. Takahashi had tried in a domineering, aggressive manner to overwhelm Mr. DaCosta to make non-earner benefits an issue for arbitration. Nevertheless, Mr. DaCosta maintained his position that he had made no formal request for non-earner benefits, that this issue had never been mediated and that he has no intention to proceed on this issue. Given that there was no objective evidence that this issue has ever been mediated²⁰ and Mr. DaCosta's submission that he had no intention to proceed on this issue, I declined to deal with the issue of non-earner benefits as part of the preliminary issue regarding as to whether Mr. DaCosta was employed at the time of the car accident.

3. Written submissions that were not required

Another example of Ms. Takahashi trying to needlessly prolong the proceeding is with respect to the submissions on the preliminary issue. Before the hearing began Ms. Takahashi presented her written submissions on the preliminary issue. Mr. Clonfero had only partially responded in writing. At the conclusion of the hearing on February 27, 2001 it was decided that the submissions would be concluded in writing. Despite the fact that Mr. DaCosta had the burden of proof and was entitled to go first in presenting his submissions, it was agreed that Mr. Clonfero would finish his response to Ms. Takahashi 's submissions and that Ms. Takahashi would reply.

Unfortunately, Ms. Takahashi, for a valid reason, was unable to provide her submissions in the alloted time and in a letter dated March 23, 2001 asked for an extension of time to present her submissions.

On March 25, 2001 Mr. Clonfero wrote to me with a copy to Ms. Takahashi. He stated that Mr. DaCosta was anxious about any further delays in the proceeding and that he was willing to rest his case on the basis of the existing evidence and submissions.

On March 27, 2001 I wrote to both parties and advised them that after reviewing the evidence and submissions received, no further submissions were required. Despite this order, Ms. Takahashi sent in Dominion's written submissions and insisted that they be reviewed by me. She was advised by the Case Administrator, on my instructions, that as per my letter of March 27, 2001 I would not be reviewing her submissions.²¹ Clearly had I accepted Dominion's submissions it would have required a response on the part of Mr. DaCosta and a further reply by Dominion. Again this would have unnecessarily prolonged the proceeding and created further expenses for the parties.

4. An unnecessary expense hearing

When it came to dealing with the issue of expenses, Mr. Clonfero was satisfied to include it as part of the decision of the preliminary issue.²² Ms. Takahashi opposed this position on the basis that she could not make submissions on expenses without reviewing the final decision. As a result, to avoid another prolonged discussion, I decided that the expense issue would be a separate proceeding.²³

After the decision on the preliminary issue was issued, Mr. Clonfero, in a teleconference with myself and Ms. Takahashi, suggested that for the sake of expedience, to save time and money, the decision on the expenses should also include a decision on the assessment of the expenses. Ms. Takahashi, on the other hand, insisted that two separate proceedings must be held. She submitted that the Commission never combined the two issues of entitlement to expenses and the assessment of expenses in one decision. However, she provided no case law or reference to any rule that the arbitrator is restricted to dealing with entitlement and quantum of expenses in a two-step process.²⁴

On this point I agreed with Mr. Clonfero that it was an unnecessary expense, a waste of time and money, to hold two separate hearings. This view is in keeping with the general rules of dispute resolution in the statutory accident benefit scheme, namely, that disputes be dealt with in the most just, quickest and least expensive way. I, therefore, ruled against Ms. Takahashi.

Despite this ruling, Dominion, in its expense submissions dated September 24, 2001, persisted in its view that there be a separate proceeding for the assessment of expenses. Dominion submitted "... we feel that it is highly inappropriate for Mr. Clonfero to submit to you his bill of costs when you have not even rendered a decision with respect to which party will bear the expenses of the hearing." I disagree.

In my view, if Mr. DaCosta's counsel was willing to take the time to prepare his bill of costs to be included in the expense hearing, this was another example of Mr. DaCosta's wish to shorten the proceedings. In the circumstances of this case, I find that Mr. DaCosta's position of wanting to include the expense decision as part of the preliminary issue decision and also avoid a separate hearing on the assessment was reasonable. On the other hand, Dominion's insistence that separate expense and assessment proceedings be held did not have a reasonable basis and was a further example of its wanting to unnecessarily prolong the proceedings with the resulting increase in costs.

E. Conclusion

The preliminary issue to be decided in this case was not complex. It was a very straightforward issue. In fact, it could have easily been dealt with in an oral proceeding within a half a day, or easily by written submissions. In support of this latter point, I note that Dominion was able to present quite comprehensive written submissions, before the preliminary issue hearing began, based on the Affidavits and evidence already produced.

Although Mr. DaCosta was not successful in this arbitration hearing, I find Mr. DaCosta had a legitimate issue to dispute. At all times I find Mr. DaCosta conducted his case in a manner which would have shortened the proceedings. On the other hand, I find the conduct of Dominion unnecessarily prolonged the proceedings. It did so by:

• conducting a lengthy and mostly irrelevant cross-examination of Mr. DaCosta;

• by examining witnesses which did not add anything of relevance to the Affidavits and reports filed; and

• by requiring that there be a separate expense hearing when in the circumstances of the case it was not reasonable.

For all these reasons I find that Dominion's conduct with respect to this preliminary issue hearing prolonged the proceedings. Accordingly, I find that Mr. DaCosta is entitled to his expenses.

III. Assessment of Expenses

In the decision of Henri and Allstate Insurance Company of Canada,²⁵ Arbitrator Makepeace listed a number of general principles that have emerged from arbitration decisions regarding assessments of expenses. I agree with her conclusion that: "the main criterion in assessing an applicant's claim for arbitration expenses is reasonableness, subject to the rules set out in the expense regulation," and "rather than a 'line by line' enquiry into an applicant's 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."

A. Submissions

1. Mr. DaCosta's Submissions

Mr. DaCosta claims his legal expenses for the preliminary issue hearing commencing from January 15, 2001 to February 27, 2001 for 92.5 hours at $100 an hour for a total of $9,250 plus GST. Mr. DaCosta submits that these legal expenses are for the preparation of the evidence for the hearing, the preparation of all supporting material, the repeated requests for adjournment during the month of January, as well as for the preparation and attendance at the preliminary issue hearing on February 26 and 27, 2001. In addition, Mr. DaCosta claims disbursements of $2,145.60.

2. Dominion's Submissions

Dominion disputes the hours claimed by Mr. DaCosta's counsel, which it mistakes to be 115.5 hours, on the basis that the services performed by Mr. Clonfero do not relate to the issue of "employment status." However, it should be noted at this point that in fact Mr. DaCosta is not claiming his legal fees for the time period of July 11, 2000 to January 15, 2001 for which Dominion disputes a number of items. I have therefore omitted Dominion's submissions on these items.

For the relevant period for which Mr. DaCosta is claiming his legal fees, January 15, 2001 to February 27, 2001, Dominion disputes three entries in Mr. DaCosta's Bill of Costs.²⁶ One, January 20, 2001 where 3.60 hours are claimed for "Research cases on QuickLaw and review law re reasonable notice and entitlement." Two, January 26, 2001 where 3.00 hours for "Telephone call with A. Shah, FSCO re Portuguese interpreter; draft letter and attend to execute documents; research evidence; meet client." And three, February 1, 2001 where 1.30 hours are claimed for "Send authorization out, follow-up on not [sic] and consult PRJ."

Specifically, Dominion made the following objections: One, Dominion submits the entry on January 20, 2001 is unrelated to the issue of employment status. And two, regarding the entries of January 26 and February 1, 2001, Dominion submits that there is no reason "why a lawyer with six years of experience is required to discuss the necessity of a Portuguese interpreter with FSCO", or send out his client 's signed authorization.

Dominion also disputes the hourly rate claimed and submits that it should be limited to $75.38 because Mr. Clonfero was called to the Bar in 1995.

With respect to the di sbursements, Dominion disputes the accountant's bill of $1,300 (originally claimed to be $3,300 as a result of a typing error) as not being required for the purposes of the preliminary hearing. In addition, Dominion disputes the sum of $53 for conduct money to Ms. D. Danilko on the basis that Mr. Clonfero was not successful in serving her with a Summons to Witness and that Dominion had served Ms. Danilko with a summons and conduct money.

B. Findings

1. Legal Fees

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)²⁷; 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.

however, where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded.

I have reviewed Mr. DaCosta's Bill of Costs and, in respect of the three items that Dominion disputes, I would defer to the principles outlined in the Henri case that the main criterion in assessing an applicant 's claim for arbitration expenses is "reasonableness" and that an arbitrator need not engage in a 'line by line' enquiry into an applicant 's claim for expenses. In reviewing these items I do not find Mr. DaCosta's claims for legal expenses for these items to be unreasonable for the preliminary issue hearing. Accordingly, I find that Mr. DaCosta is entitled to his legal fees for 92.5 hours.

I am also satisfied that in the circumstances of this case the hourly rate of $100 is justified. Mr. DaCosta's legal expenses would have been considerably lower had this case not been unnecessarily prolonged by the actions of Dominion. An applicant who is awarded expenses at an arbitration hearing does not recoup his or her true expenses at the legal aid rate. In my view Mr. DaCosta should not be penalized for the actions of Dominion. Accordingly, I find that the amount of $100 an hour for legal fees in the circumstances of this case is justified.

Accordingly, I find that Mr. Da Costa is entitled to his legal fees in the amount of $9,250, plus GST.

2. Disbursements

Mr. DaCosta claims for the following expenses:

File Application for Arbitration

$100.00

Obtain file from Dominion of Canada

28.74

Torbridge - file retrieval

206.00

Copies

157.72

PST on Copies

12.62

Conduct money to D. Danilko re pre-hearing

53.00

Courier

19.20

Copies

37.10

Payment to Lorimar (invoice #16763)

38.08

Transcript of FSCO hearing

358.76

Professional Services supplied by Rich Rotstein Limited

1,300.00

TOTAL

$2,311.22

Dominion disputes Mr. DaCosta's claim for the services of an accountant, Mr. Rich Rotstein, as well as the payment of conduct money to Ms. Danilko.

I agree with Dominion that the expense of $1,300 for the services of an accountant was not required for the purpose of the preliminary issue hearing which dealt with the narrow issue of the status of Mr. DaCosta's employment at the time of the accident. I, therefore, deny this expense.

Dominion disputes the expense of $53 for conduct money to Ms. Danilko on the basis that Mr. Clonfero was unsuccessful in serving her with a Summons to Witness. If there is evidence that the cheque of $53 for conduct money was cashed, then Dominion is liable for this expense.

Accordingly, I find Mr. DaCosta is entitled to his disbursement expenses in the amount of $1,011.22 and the applicable GST, less $53 if the cheque to Ms. Danilko was not cashed.

July 17, 2002

Joyce Miller Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 108

FSCO A00-000214

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JOSE M. DACOSTA

Applicant

and

DOMINION OF CANADA GENERAL 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. Dominion shall pay Mr. DaCosta his expenses in the amount of $10,261.22, plus applicable GST, less $53 if the cheque to Ms. Danilko was not cashed.

July 17, 2002

Joyce Miller Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98 and 114/00.
2. 2Ontario Regulation 664, R.R.O. 1990, as amended by O.Reg 464/96 enacted on November 1, 1996
3. 3See for example: McCormick and Economical Mutual Insurance Company, (OIC A-000139, October 2, 1991); Calogero and The Co-operators General Insurance Company, (OIC P-000251, February 13, 1992); Allison and Markel Insurance Company of Canada, (OIC P-001231, August 21, 1996); Biliouras and Allstate Insurance Company of Canada, (FSCO P98-00002, October 13, 1998); Athanasiadis and Zurich Insurance Company, (FSCO A 97-001239, December 23, 1999); Gray and Zurich Insurance Company, (FSCO P-98-00047, June 11, 1999); and Morelli and Zurich Insurance Company, (FSCO A97-001997, June 27, 2000).
4. 4Dominion in its submissions on expenses, dated September 19, 2001, stated "At the commencement of the hearing on January 30, 2001, we were forced to request another adjournment on the basis that critical medical documentation were [sic] missing." [emphasis added]
5. 5See pages 14 and 15 of the transcript
6. 6See page 17 of the transcript
7. 7For some examples see transcript pages 67, 87, 88,114 , 115, 125, 131,132, 133, 139,143, 144,152-160, 162, 171-173, 178, 184-185, 276.
8. 8See for example pp. 67, 75-76,139 - 140, 173 of the transcript
9. 9See pp. 171 and 276 of the transcript
10. 10See for example pp. 59, 66, 67, 75-76, 81-82, 84-88, 115, 125, 137-140, 143-144, 150-160, 162, 164-171, 176-177, 191, 198 of the transcript
11. 11See for example pp. 87, 133-134 of the transcript
12. 12See for example pp. 133-134, 228-231, 276 of the transcript
13. 13See pp. 221-222 and 276 of the transcript
14. 14See pp. 228-231and 276 of the transcript
15. 15See pp. 248 -252 of the transcript
16. 16Pursuant to subsection 281(2) of the Insurance Act, no person may bring a proceeding to arbitration unless mediation has first been sought and failed.
17. 17It should be noted that at the start of the hearing I stated that the pre-hearing letter indicated that the non-earner benefit was an issue for the arbitration. This was not disputed by Mr. DaCosta. However, it was only towards the end of the hearing (see p. 271 and 276 of the transcript) that it became clear that Mr. DaCosta was not pursuing this issue but that Dominion wanted it to be an issue.
18. 18See pp 267-270 of the transcript
19. 19At p. 271 of the transcript
20. 20See pp. 284-285 of the transcript
21. 21It is not an unusual practice in the justice system to decline to hear a party's submissions when it is clear to the adjudicator that the party will be successful in a judicial proceeding. It saves both time and money.
22. 22See p. 286 of the Transcript
23. 23Ibid.
24. 24In fact, the Commission does combine together the expense decision and the assessment decision into one hearing. For example, see Pires and Zurich Insurance Company, (FSCO A97-000110, June 28, 2000) and Hughes and Allstate Insurance Company of Canada, (FSCO A99-000911, April 2, 2002).
25. 25Assessment of Expenses decision (OIC A-007954, August 8, 1997)
26. 26Dominion in fact has disputed more than three items in Mr. DaCosta's Bill of Costs, but they did not pertain to the period for which Mr. DaCosta is claiming his legal fees.
27. 27Now the Ontario Superior Court of Justice