Kokilaben Gandhi v. Motor Vehicle Accident Claims Fund, 2006 ONFSCDRS 142

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 142

FSCO A04-002430

BETWEEN:

KOKILABEN GANDHI

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

DECISION ON EXPENSES

Before:

Maggy Murray

Heard:

July 7, 2006, by telephone conference call arranged by the Financial Services Commission of Ontario in Toronto.

Appearances:

Eric Heath for Mrs. Gandhi

Joseph Lin for Motor Vehicle Accident Claims Fund

The Applicant, Kokilaben Gandhi, was injured in a motor vehicle accident on November 5, 2001. In a decision dated April 12, 2006, I dealt with her claim for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Mrs. Gandhi is not entitled to receive a rehabilitation benefit pursuant to paragraph 15(5)(l) of the Schedule for the cost of two round-trip economy class airline tickets from Canada to India in the total amount of $2,860.00 for travel between May 31, 2005 to November 19, 2005.
No interest is payable by MVAC Fund to Mrs. Gandhi.

The issue in this further hearing is:

Is MVAC Fund entitled to its expenses incurred in respect of this arbitration hearing, and if so, in what amount?

MVAC Fund is entitled to its expenses of the arbitration proceeding assessed in the amount of $1,875.29.

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

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.

The criteria for determining entitlement to expenses of the arbitration proceeding are set out in s.12 of Ontario Regulation 664, R.R.O. 1990, as amended ("the expense regulation"). According to Pinto and General Accident Assurance Co. of Canada,² the expense regulation that applies is the regulation in effect at the time the Application for Arbitration was commenced. On November 16, 2004 (ie., the date the Application for Arbitration was commenced), s.12 of the expense regulation read as follows:

12(2) An arbitrator shall, under subsection 282(11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

Each party's degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
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.
Whether any aspect of the proceeding was improper, vexatious or unnecessary. I consider each of the five criteria in order.

1. Each party's degree of success in the outcome of the proceeding.

The hearing concerned Mrs. Gandhi's claim under paragraph 15(5)(l) of the Schedule for the cost of two round-trip economy class airline tickets from Canada to India in the total amount of $2,860.00. Mrs. Gandhi was completely unsuccessful. MVAC Fund was completely successful.

2. Any written offers to settle made in accordance with subsection (3).

Neither party made any written offer to settle.

3. Whether novel issues are raised in the proceeding.

The issue of whether overseas airline tickets is covered by the Schedule is not novel. It was considered and rejected in previous arbitration decisions.³

4. 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.

Neither party prolonged, obstructed or hindered the progress of the proceeding.

5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.

The day before the hearing, Mrs. Gandhi served MVAC Fund with a medical brief that was relied upon at the arbitration. Pursuant to rule 39.1 of the Dispute Resolution Practice Code - Fourth Edition (the "Code"), all documents that a party will rely on at a hearing must be served on the other party at least 30 days before the hearing. In addition, on the morning of the hearing, Mrs. Gandhi's counsel advised MVAC Fund that it would call Mr. Pesant, a social worker, to give evidence at the hearing. Pursuant to rule 41.1 of the Code, each party must provide the other party with the names of witnesses it intends to call at least 30 days before the hearing. Late service of the medical brief and late notification of Mr. Pesant appearing as a witness were both improper. Despite the aforementioned, MVAC Fund wished to proceed with the hearing as scheduled and did not request an adjournment.

No aspect of the proceeding was vexatious.

On behalf of Mrs. Gandhi, Mr. Heath submitted that because Mrs. Gandhi is of modest means and was seriously injured in the motor vehicle accident, no expenses be awarded to MVAC Fund. However, only the above criteria can be considered in awarding expenses.⁴ Having regard to all the criteria, I find that Mrs. Gandhi should pay MVAC Fund its expenses of the arbitration proceeding.

Amount of Expenses:

The amount of expenses and disbursements which I may award are set out in s.3 of the Schedule to Ontario Regulation 664 which states:

3(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:

For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.

(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.

MVAC Fund claimed a total of 20.8 hours divided as follows: Mr. Lin, who was called to the bar in 2001, claimed 16.4 hours of preparation time and attendance time for the arbitration proceeding. Based on his years of experience, Mr. Lin's maximum allowable hourly rate at the time of the hearing on March 14, 2006 was $83.10 per hour. MVAC Fund claimed a further 4.4 hours of preparation time by Mr. Kerkmann, who was called to the bar in 1996. Based on his years of experience, Mr. Kerkmann's maximum allowable hourly rate at the time of the hearing on March 14, 2006 was $92.34 per hour.

On behalf of Mrs. Gandhi, Mr. Heath submitted that MVAC Fund's claim of 20.8 hours was excessive. Mrs. Gandhi's counsel's office spent a total of 34.9 hours on the arbitration proceeding (9 hours by Charlia von Buchwald who was called to the bar in 1978; 15.2 hours by Mr. Heath who was called to the bar in 2003; and 10.7 hours by Roberta Benson, law clerk). In these circumstances, Mrs. Gandhi's counsel cannot successfully argue that the time spent by opposing counsel was excessive.

Having regard to the criteria set out in Ontario Regulation 664, as well as Mr. Heath's assessment of what he considered reasonable preparation time, I find MVAC Funds' claim for expenses reasonable. I allow MVAC Fund 16.4 hours of Mr. Lin's time at the maximum hourly rate of $83.10. I allow MVAC Fund a further 4.4 hours of Mr. Kerkmann's time at the maximum hourly rate $92.34. MVAC Fund's total counsel fee is $1,769.14.

MVAC Fund did not claim any disbursements.

The total allowable expenses of the arbitration proceeding are $1,875.29 ($1,769.14 + GST at 6%).

August 24, 2006

Maggy Murray Arbitrator

Date