Neutral Citation: 2004 ONFSCDRS 182

File Numbers: FSCO A02–001734 / FSCO A03–000161, FSCO A02–001733, FSCO A03–000512

Between:

Cornelia Anang and Georgina Ampomah and Agnes Quarshie Applicants

and

Guarantee Company of North America Insurer

DECISION ON EXPENSES

Before: Beth Allen

Heard: Written submission were received by November 5, 2004

Appearances: Brent Vickar for Ms. Anang, Ms. Ampomah and Ms. Quarshie Terry Shillington for Guarantee Company of North America

The Applicants, Ms. Cornelia Anang, Ms. Georgina Ampomah and Ms. Agnes Quarshie, claim they were injured in a motor vehicle accident on July 15, 2002. Ms. Anang further claims she was injured in a second accident on July 30, 2002. The Applicants claim accident benefits under the Schedule.¹ Guarantee Company of North America ("Guarantee") alleges that the Applicants were not involved in accidents within the meaning of section 2(1) of the Schedule. The parties were unable to resolve their disputes through mediation, and they applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The arbitration hearing took place on December 15, 2003. In a decision dated March 11, 2004, I decided the Applicants are precluded from proceeding to arbitration on the basis that, Ms. Anang, Ms. Ampomah and Ms. Quarshie were not injured in an accident on July 15, 2002, and that Ms. Anang was not injured in an accident on July 30, 2002.

The issue in dispute in this hearing is:

Is Guarantee entitled to its expenses pursuant to subsection 282(11) of the Insurance Act?

Guarantee is entitled to a portion of its arbitration expenses fixed at $400.00 from Ms. Anang, $200.00 from Ms. Ampomah, and $200.00 from Ms. Quarshie, each award inclusive of G.S.T.

Entitlement:

Subsection 282(11) of the Insurance Act gives arbitrators the discretion to award expenses to parties to an arbitration hearing. The parties bring their claims for expenses under subsection 12 of Regulation 664² of the Insurance Act. These criteria are repeated in Rules 75 and 76 of the amended Dispute Resolution Practice Code.³

Rule 75 requires an arbitrator to apply the following criteria: (a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether novel issues are raised in the proceeding; (d) the conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders; and (e) whether any aspect of the proceeding was improper, vexatious or unnecessary.

EXPENSES:

Entitlement

Guarantee claims its arbitration expenses incurred in relation to the arbitration hearing. The Applicants assert that the parties should bear their own arbitration expenses. I accept the Applicants' position that they should bear their own expenses. However, I award Guarantee a portion of its expenses for the following reasons:

I apply criterion (a) of Rule 75 to the Applicants' disfavour since they were clearly unsuccessful in the outcome of the hearing.

Criterion (b) does not apply since neither the Applicants nor Guarantee filed an Offer to Settle.

Regarding criterion (c), I find the issues in dispute are not novel.

Concerning the issue of delay under criterion (d), Guarantee and the Applicants agreed to an approach in this matter that I find averted a potentially complicated and more protracted arbitration process. The Applicants' cases were initially commenced by way of four separate arbitration applications (two arbitration applications by Ms. Anang for the two accidents in which she claims to have been involved; and one application by each of Ms. Ampomah and Ms. Quarshie in relation to the accident in which they claim to have been involved.) The parties agreed that these matters be combined and heard together; and further that the matter should first proceed by a preliminary hearing into the jurisdictional issue. This approach facilitated the expeditious disposition of this matter.

On the other hand, I also considered criterion (d) in my finding against the Applicants on the expense issue. I found in my earlier decision that Ms. Anang's, Ms. Ampomah's and Ms. Quarshie's oral evidence about the July 15, 2002 accident and Ms. Anang's and Ms. Antwi's testimonies about the July 30, 2002 accident, were implausible and unreliable, and that these witnesses came to the hearing with very few details about the accidents. I find these witnesses should have been able to furnish more evidence than they did about accidents they were purportedly involved in only five months before the hearing. I conclude that needless time and resources were expended by counsel, the Commission and Guarantee in bringing about and finally disposing of this matter, under circumstances where the Applicants seemed to make little effort in presenting evidence to support their cases. While the hearing itself was not lengthy, I find had the Applicants been more forthcoming at an earlier stage about the accidents, that the arbitration process might not have been as lengthy as it was.

Quantum

Under subsection 282(11) of the Insurance Act, Guarantee's counsel claims the following:

Assessment fees (@ $3,000/application per arbitration): $ 12,000.00

*Counsel Fees (for Mr. Shillington 26 hrs. @ $92.33/hr.; an associate 11.5 hrs. @$73.87/hr.; and a law clerk 5 hrs. @ $23.00/hr.): $ 3,364.79

*Disbursements (for expert fees, courier fees, photocopying, mileage, overnight expenses/meals $ 6,707.01

TOTAL $ 22,071.80

*calculated in accordance with Rule 75 of the Code and the Legal Aid Services Act and Tariffs

I find that neither the Insurance Act and Regulations, nor Rule 75 of the Code, provide for an insurer to claim any portion of its $3,000 assessment fee as an arbitration expense. Parties were permitted to make such a claim under previous legislation, subsection 282(11.2) of the Insurance Act, which was revoked effective October 1, 2003. I find that Guarantee's claim of $12,000 for its assessment fees is inappropriate and I therefore did not take it into account.

In arriving at my decision I considered that the Applicants are required to pay their own arbitration expenses.

I therefore order the Applicants to pay the following portions of Guarantee's arbitration expenses pursuant to subsection 282(11) of the Insurance Act. Ms. Anang shall pay a fixed amount of $400.00 on the basis of her two applications for arbitration; Ms. Ampomah shall pay a fixed amount of $200.00; and Ms. Quarshie shall pay a fixed amount of $200.00 – each award inclusive of G.S.T.

December 2, 2004

Beth Allen Arbitrator

Date

ARBITRATION ORDER

Neutral Citation: 2004 ONFSCDRS 182

File Numbers: FSCO A02–001734 / FSCO A03–000161, FSCO A02–001733, FSCO A03–000512

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

CORNELIA ANANG and GEORGINA AMPOMAH and AGNES QUARSHIE Applicants

and

GUARANTEE COMPANY OF NORTH AMERICA Insurer

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

Ms. Anang shall pay a fixed amount of $400.00 of Guarantee's arbitration expenses, inclusive of G.S.T., pursuant to subsection 282(11) of the Insurance Act.
Ms. Ampomah shall pay a fixed amount of $200.00 of Guarantee's arbitration expenses, inclusive of G.S.T., pursuant to subsection 282(11) of the Insurance Act.
Ms. Quarshie shall pay a fixed amount of $200.00 of Guarantees' arbitration expenses, inclusive of G.S.T., pursuant to subsection 282(11) of the Insurance Act.