Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 87

Appeal P02-00035

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ZURICH NORTH AMERICA CANADA

Appellant

and

STEVEN H. STELZER

Respondent

Before:

Nancy Makepeace

Representatives:

Jennifer Guth for Zurich

Kelly Siegner for Mr. Stelzer

Hearing Date:

Written submissions completed on April 15, 2004

EXPENSES ASSESSMENT

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Stelzer’s arbitration and appeal expenses are assessed at $12,461.95. Zurich shall pay this amount forthwith.

2. Zurich shall pay medical benefits of $1,367.19 and interest of $6,804.91 in accordance with the order of Arbitrator Muir.

June 10, 2004

Nancy Makepeace

Director’s Delegate

Date

REASONS FOR DECISION

I. INTRODUCTION

This appeal concerned the application of issue estoppel (res judicata) in accident benefits adjudication. On August 17, 2000, Arbitrator Miller dismissed Mr. Stelzer’s claim for medical benefits, under s. 14 of the SABS-1994,¹ between January 1, 1997 and June 16, 1998. In a second arbitration decision, dated November 20, 2002, Arbitrator Muir allowed a claim for similar medical benefits for the period between June 17, 1998 and October 21, 2001, plus interest under s. 46(2). Zurich North America Canada (“Zurich”) appealed Arbitrator Muir’s decision, arguing that the matter had been decided in the first arbitration decision.

On February 6, 2004, I dismissed the appeal. I invited the parties to contact me with respect to appeal expenses if they were unable to agree.

Ms. Siegner submitted Mr. Stelzer’s Bill of Costs on March 3, 2004, Ms. Guth responded for Zurich on April 1, 2004, and Ms. Siegner submitted further comments on April 7, 2004. Both parties filed final submissions on April 15, 2004.

The parties agree that the matter may be disposed of based on their written submissions alone. They also agree that I should assess Mr. Stelzer’s arbitration expenses as well as his appeal expenses. There is no dispute that Mr. Stelzer, who succeeded at both arbitration and appeal, should be awarded his expenses in accordance with the Expense Schedule. Therefore, I need not consider the effect of the recent amendments to the criteria for awarding expenses.²

II. ANALYSIS

Though initially the parties were unable to agree about the amount of interest owing on the medical benefits awarded by the Arbitrator, Zurich has now agreed to pay interest of $6,804.91 as well as medical benefits of $1,367.19, for a total of $8,172.10.

The parties expedited the expenses assessment by narrowing the items in dispute, as required by Rule 79 of the Dispute Resolution Practice Code (“the Code”). Zurich disputed the following items.

Legal Fees

Zurich did not dispute the number of hours billed on Mr. Stelzer’s behalf. Nor did it challenge the hourly rate for Mr. William J. Sammon, Ms. Siegner’s senior counsel (1.1 hours at $150 an hour, for a total of $165).

Zurich objects to Ms. Siegner’s claim for reimbursement at a rate of $100 per hour. It argues that Ms. Siegner, who was called in February 2002, does not qualify for an experience allowance, and has not justified an increase over the Legal Aid rate.

Ms. Siegner states she has been practising for just over two years in civil litigation and family law, and that her usual hourly rate is $150 as of July 2003. This is the rate she could have charged Mr. Stelzer for the appeal hearing, which was held in July 2003, but she presumably charged a lower rate for the arbitration hearing, held in September 2002. I agree with Ms.

Seigner that the issue in dispute – the application of the doctrine of issue estoppel to medical benefits adjudication – was significant and novel, and she conducted the claim in an efficient and professional manner.

Pursuant to paragraph 3(3) of the Expense Schedule, Rule 78.1 of the Code authorizes an hourly rate higher than the Legal Aid rate where the adjudicator is satisfied this is justified. I find $100 an hour to be a reasonable fee.

Zurich shall pay Mr. Stelzer’s arbitration legal fees in the amount of $6,350 plus GST of $444.50,³ and his appeal legal fees of $3,585 plus GST of $250.95, for a total of $10,630.45.

Mr. Stelzer’s Lost Wages

Mr. Stelzer seeks reimbursement of $2,000 for four days’ lost wages relating to his participation in the arbitration pre-hearing (May 22, 2002), the arbitration hearing (September 10, 2002), and the appeal hearing (July 18, 2003), as well as attendances to obtain updated medical reports. The arbitration and appeal hearings were held in Ottawa, where Ms. Siegner works; Mr. Stelzer lives in Montreal. The arbitration pre-hearing was held by telephone conference.

Zurich disputes this claim on several grounds. I need only deal with two.

Zurich argues that Mr. Stelzer should not be able to claim lost wages relating to the arbitration pre-hearing or the appeal because there was no need for him to attend or participate in either proceeding. I reject this. As a party to the proceeding, Mr. Stelzer was entitled to attend the arbitration pre-hearing, arbitration hearing and appeal hearing. Indeed, the parties are expected to participate. In accordance with Rule 37.7 of the Code and s. 6(3)(b) of the Statutory Powers Procedure Act, the Commission’s Notice of Hearing, which was sent to Mr. Stelzer and Zurich in advance of the arbitration hearing, stated:

You may attend this hearing in person and/or be represented. If you or your representative do not attend at the hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of the arbitration proceedings.

Though notices of appeal hearing take slightly different form, and many insured persons and insurers choose to appear only through their representatives, the parties are entitled to attend in person. The insured person does not attend an arbitration or appeal hearing just in the role of a witness. Having an opportunity to attend a hearing that disposes of rights, privileges or interests is a fundamental element of procedural fairness.

Additional considerations apply in the case of the arbitration pre-hearing, which was held by telephone. The pre-hearing letter indicates that Mr. Stelzer participated. Presumably, he attended at Ms. Siegner’s office for the discussion. The Commission’s Notice of Pre-Hearing Discussion, which was sent to Mr. Stelzer and Zurich in advance of the arbitration pre-hearing, stated:

The arbitration pre-hearing is designed for the direct involvement of both parties. Clients are expected to be available and to participate in the telephone conference call.

Presumably, Zurich’s argument is that Mr. Stelzer could have participated from Montreal, and did not need to drive to Ottawa for the occasion. However, this might have complicated communication with his counsel. If an oral (face-to-face) pre-hearing had been held, he would have been entitled to attend in Ottawa or at FSCO’s offices in Toronto. Considering the moderate distances involved, I am not persuaded his decision to attend in his lawyer’s office was so unreasonable as to deprive him of related costs.

However, the basic problem with Mr. Stelzer’s lost wages claim is that I have no authority to make such an order. There is no express provision for lost wages in the Expense Schedule, and the only possible basis for implied authority, paragraph 4.4, pertains only to disbursements. It states:

4. The amount of the following disbursements made by or on behalf of the insured person or the insurer may be awarded:

5. For other out-of-pocket expenses incurred in furtherance of the arbitration, appeal, variation or revocation hearing.

“Disbursements” refers to amounts paid or payable. It does not refer to lost income.⁴ In any event, the “limited class” principle of statutory interpretation states: “Where the legislature sets out a list of items followed by a general term embracing the listed items, the scope of the general term may be limited to any genus or class to which the specific items all belong.”⁵ Lost wages are not in the same class as the other expenses listed in paragraph 4 – long distance charges, facsimile charges, typing, printing and copying charges, mail and courier charges, and taxes on the allowable expenses. I conclude that lost wages are not recoverable as arbitration or appeal expenses.⁶

Mr. Stelzer’s Meal Expenses

Mr. Stelzer seeks reimbursement of meal expenses in the amount of $150 relating to the arbitration hearing and the appeal hearing, both of which he claims were full-day hearings. I have no reason to doubt that the arbitration hearing lasted a good part of a day, but the appeal hearing started at 2:00 p.m. and finished at 3:30 p.m., lasting less than half a day.

The Expense Schedule does not include a specific rule for meal allowances, but allows an award of up to $150 for “overnight expenses and meals . . . for each overnight stay required for the person” [emphasis added].⁷ The italicized words suggest meal expenses are only recoverable if the person stays overnight, and Mr. Stelzer did not provide any authority to the contrary. As he did not stay overnight for either hearing, no meal allowance is payable.

Mr. Stelzer’s Mileage Allowance

Mr. Stelzer claims a mileage allowance for three days – the pre-arbitration hearing, arbitration hearing, and appeal hearing. For each day, he claims an allowance of $202.40 for the 440 kilometre round-trip between Montreal and Ottawa, at a rate of $0.46 per kilometre.

As well as arguing there was no need for Mr. Stelzer to attend the pre-arbitration hearing or the appeal, Zurich submits Mr. Stelzer is only entitled to reimbursement for one round-trip of 384 kms at $0.30 per km.

Paragraph 6(2)(b) of the Expense Schedule authorizes reimbursement at $0.30 per km for “one return trip between the person’s residence and the place in which the arbitration or hearing takes place” or the amount incurred by the person, whichever is less. I heard no evidence about the amount incurred, apart from Ms. Siegner’s comment about the increased price of gas.

I do not accept Zurich’s submission that paragraph 6(2)(b) prevents Mr. Stelzer from claiming a mileage allowance for more than one of his three trips to Ottawa. This provision must be read together with the two other provisions governing travelling expenses. Paragraph 6(2), in its entirety, reads as follows:

(2) The maximum amount of travelling expenses that may be awarded for a person,

(a) for an arbitration or a hearing that takes place in the municipality in which the person resides is the amount incurred by the person for each day of his or her necessary attendance at the arbitration or hearing;

(b) for an arbitration or a hearing that takes place outside the municipality in which the person resides and within 300 kilometres of his or her residence is the lesser of,

(i) 30 cents per kilometre for one return trip between the person’s residence and the place in which the arbitration or hearing takes place, or

(ii) the amount incurred by the person;

(c) for an arbitration or a hearing that takes place 300 or more kilometres from the person’s residence is the lesser of,

(i) the amount of the return economy airfare for the person plus 30 cents per kilometre for one return trip between his or her residence and the airport and for one return trip between the airport and the place of the arbitration or hearing, or

(ii) the amount incurred by the person.

These rules are intended to encourage prudent travel choices. If the hearing takes place in the person’s home town, the person is expected to commute, and daily travel expenses are recoverable. If the hearing takes place 300 or more km away, the person may recover economy airfare plus transfer costs, or amounts incurred, whichever is less. Only one return trip is paid for because the person is expected to remain overnight, which is likely to be less expensive than commuting daily over such large distances. This places Mr. Stelzer’s claim in context. Because the hearings were held in Ottawa, not Montreal, his recoverable expenses would have been assessed on the expectation of an overnight stay, if the hearing had lasted more than one day. This is the purpose underlying the “one return trip” restriction. The rule is not intended to discourage persons from attending three separate hearings. Mr. Stelzer is entitled to be reimbursed for one round-trip between Montreal and Ottawa for each of the three proceedings – the pre-arbitration hearing, the arbitration hearing and the appeal hearing.

Ms. Siegner relied on the distance table posted on the Government of Ontario website, which indicates the distance from Montreal to Ottawa is 200 km. However, the opening page of the table states it is not to be used to calculate travel expenses, and links the reader to two commercial links. Mapquest, the more precise of the two, calculates the distance, door to door, at a little over 384 km per trip, for a total of 1,154.12 km for the three round trips. At $0.30 per km, Mr. Stelzer is entitled to $346.24.

Photocopies

Mr. Stelzer seeks reimbursement for the cost of 4,100 photocopies, at $0.25 per copy, plus GST, for a total of $1,096.75. Ms. Siegner advises this is an estimate. When Zurich requested a disbursement account, Ms. Siegner merely repeated her offer to provide a disbursement account, “however, that will be the number on the account.”

A party seeking arbitration or appeal expenses is expected to provide supporting documentation of any disbursements. However, I have no doubt Mr. Stelzer incurred photocopying costs in pursuing his arbitration and appeal. Ms. Siegner filed and served two exhibit briefs on his behalf at arbitration, and she filed a brief of authorities in the appeal proceeding. By my rough estimate, these amounted to about 400 pages, and at least two other copies must have been made, bringing the total to 1,200 pages. I am prepared to assume that additional photocopying would have been required in the normal course of Commission proceedings. I find it reasonable to allow for 1,600 pages at $.25 per page, for a total of $400, plus GST of $28.

III. CONCLUSION

Based on the parties’ agreement about the amounts owing pursuant to the Arbitrator’s order, Zurich shall pay medical benefits of $1,367.19, under s. 14 of the SABS-1996, and interest of$6,804.91 under s. 46(2) of the SABS-1996, less amounts already paid.

Zurich shall pay Mr. Stelzer’s arbitration legal fees in the amount of $6,350 plus GST of $444.50, and his appeal legal fees of $3,585 plus GST of $250.95, for a total of $10,630.45.

Zurich agreed to pay the following arbitration disbursements:

Arbitration filing fee

$100.00

Dr. Pietrobon for medical report

77.24

Dr. Pietrobon for clinical notes

33.56

Dr. Pietrobon for attendance at arbitration

400.00

Glebe Chiropractic Clinic for medical report

250.00

Courier ($80.00 plus GST of $5.60)

85.60

Postage ($16.80 plus GST of $1.18)

17.98

Long distance telephone ($35 plus GST of $2.45)

37.45

Subtotal

$1,001.83

Zurich also agreed to pay the following appeal disbursements:

Postage ($16.80 plus GST of $1.18)

$17.98

Long distance ($35 plus GST of $2.45)

37.45

Subtotal

$55.43

Zurich shall pay the following arbitration and appeal disbursements, in addition to the undisputed amounts:

Mileage allowance

$346.24

Photocopying ($400 plus GST of $28)

428.00

Subtotal

$774.24

The total amount of arbitration and appeal expenses owing to Mr. Stelzer is $12,461.95. Zurich shall pay this amount forthwith.

June 10, 2004

Nancy Makepeace

Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule – Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended.
2. 2See Howden and Pembridge Insurance Company (Pafco Ins. Co.), (FSCO P02-00031, May 17, 2004).
3. 3This corrects an error in Ms. Siegner’s arbitration billing that gives her hourly rate as $120 instead of $100.
4. 4Director Draper considered the distinction in Moons and Co-Operators General Insurance Company, (FSCO P00-00033, May 28, 2001). He confirmed the Arbitrator’s ruling that the income lost by the insured person’s mother while visiting him in hospital was not a “visitor’s expense” under s. 21 of the SABS-1996.
5. 5Ruth Sullivan, Statutory Interpretation (1997), chapter 4 (“Textual Analysis”), heading D (“The Limited Class Rule”) (Irwin: Quicklaw).
6. 6For an early decision to this effect, see Park and The Citadel General insurance Company, (OIC A-003410, February 21, 1994). The subsequent changes to the Expense Schedule do not alter the analysis.
7. 7Paragraph 6(3) states, “The maximum amount that may be awarded for overnight expenses and meals is $150 per night for each overnight stay required for the person.”