Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 24
FSCO A04-000422
BETWEEN:
PHILIP SOOBRIAN Applicant
and
BELAIR INSURANCE COMPANY INC. Insurer
DECISION ON EXPENSES
Before: Lawrence Blackman
Heard: January 27, 2006, at the Offices of the Financial Services Commission of Ontario in Toronto.
Appearances: Mr. Soobrian did not appear, nor did anyone appear on his behalf Ryan M. Naimark for Belair Insurance Company Inc.
Issues:
The Applicant, Philip Soobrian, was injured in a motor vehicle accident on September 4, 1999. My September 20, 2005 decision dealt with Mr. Soobrian's claim for statutory accident benefits under the Schedule,1 as well as the claim of Belair Insurance Company Inc. ("Belair") for repayment of certain benefits. I made the following orders, while reserving on the issue of expenses:
Belair is not obligated to continue to pay Mr. Soobrian weekly income replacement benefits pursuant to subsection 37(5) of the Schedule.
Belair is entitled to repayment of weekly income replacement benefits of $300.76 from December 9, 2002, together with interest thereon from July 6, 2004 at the bank rate in effect on that day, in accordance with subsection 47(6) of the Schedule.
Mr. Soobrian is not entitled to payment of $2,500 for the cost of an examination conducted by Dr. A. Hanick, claimed pursuant to section 24 of the Schedule.
All payments of weekly income replacement benefits by Belair to a trust account held by Messrs. Thomson Rogers in accordance with my order confirmed by letter dated April 15, 2005 shall be repaid to Belair, together with any accrued interest thereon, and shall be applied against the repayment order herein.
My September 20, 2005 decision requested further submissions from the parties as to the applicable rate of interest and the exact amount of the repayment. The parties were given twenty days from the date of the decision to serve and file written submissions. Belair filed certain further materials.
Mr. Soobrian did not respond, nor did Mr. Soobrian attend the expense hearing, although given proper notice by the Commission.
At this further hearing, Belair advised that because of the cost of retaining an expert to calculate the interest on the stream of income replacement benefits ("IRBs") ordered repaid, they were not seeking a more precise order regarding interest.
The only outstanding issue, therefore, is:
- Is either party entitled to an order of expenses in respect of this arbitration proceeding, and if so, what is the appropriate quantum of those expenses?
Result:
- Belair Insurance Company Inc. is entitled to its expenses of this arbitration proceeding, fixed in the amount of $9,864.77, including G.S.T.
EVIDENCE AND ANALYSIS:
Entitlement to Expenses
Rule 75.2 of the Dispute Resolution Practice Code (Fourth Edition, Updated - October 2003) (the "Code") sets out the criteria to be considered in awarding expenses. In accordance with these criteria, I find that Belair is entitled to its expenses of this proceeding for the following reasons:
Mr. Soobrian was unsuccessful in all of his claims. Belair was significantly successful in its claim for repayment;
Mr. Soobrian failed to pursue his claim. He failed to attend the four-day hearing notwithstanding the Notices sent by the Commission and his former counsel's repeated efforts to reach him. Such failure to attend followed Mr. Soobrian being presented with significant evidence of fraud he had committed against Belair. I find that Mr. Soobrian's claims were improper and unnecessary.
Mr. Soobrian's main claim was for IRBs. Far from establishing any continuing claim, I was persuaded, as stated in my September 20, 2005 decision, "that Philip Soobrian, both by omission and by positive assertion, has obtained payment of IRBs by Belair as a result of repeated, prolonged and material wilful (that is, wilful and intentional) misrepresentation or fraud." Mr. Soobrian's failure to attend the hearing led to a motion by his counsel to get off the record and ultimately required an adjournment of the hearing. Mr. Soobrian's continued endeavour to perpetuate fraud forced Belair to address every substantive and procedural issue which prolonged, obstructed and hindered the proceeding.
The Quantum of Expenses
Belair served on Mr. Soobrian, in accordance with the Code, and filed with the Commission, a Bill of Costs enumerating a total of 204.5 hours of legal work in respect of this proceeding at $150 an hour, together with $1,528.80 in disbursements, for a total bill of $34,458.07.
Regarding the hourly rate of counsel, Belair conceded that I was bound by Rule 78.1 of the Code, which allows insurers' counsel the applicable hourly rate allowed under the Legal Aid Services Act, 1998, adjusted to include the appropriate experience allowance.
Coming within Tier 2, the experience allowance of Belair's counsel allows for a 12.5% increase over the base rate, resulting in an hourly rate of $83.10. The Code provides that this system seeks the least expensive resolution of disputes. I do not think it was the intention of the drafters of this system that cost efficiency favour those who prolong, obstruct or hinder the proceeding at the expense of those who abide by the rules, but that has been the unfortunate result in this case.
Regarding the number of allowable hours, Belair agreed with the general approach that a line-by-line assessment of the Bill of Costs should not be taken; rather, one should look at a ratio of pre-hearing preparation time to hearing time between 1:1 and 4:1. Belair agreed that there had been 18.75 hours of hearing time in this case.
I am satisfied that the maximum ratio of 4:1 is appropriate in this case, for the following reasons:
Belair's evidence in this case was presented in an extremely efficient manner. I find that this was the result of thorough preparation. A party should not be penalized where the preparation time was well spent in facilitating an efficient and shortened hearing;
Considerable time was wasted in this proceeding by Mr. Soobrian's failure to pursue his claim and attend at the hearing. Specifically, Mr. Soobrian's failure to attend the hearing necessitated an adjournment, which resulted in Belair duplicating part of its preparation.
Accordingly, in addition to the 18.75 hours for the hearing, I allow 75 hours for pre-hearing preparation, for a total of 93.75 hours. At $83.10 per hour, I allow $7,790.63 for counsel's time. G.S.T. is allowed in the further amount of $545.34.
I find the following disbursements are properly claimed under Section F of the Code, Schedule of Dispute Resolution Expenses (which is taken from the Schedule to R.R.O. 1990, Regulation 664, Amended to O. Reg. 275/03):
telephone expenses $ 132.96 subsection 4(1)
facsimiles $ 32.75 subsection 4(1)
photocopying costs $ 507.50 subsection 4(2);
In view of the volume of material served on Mr. Soobrian and filed with the Commission, I find this amount reasonable.
courier fees $ 112.40 subsection 4(3)
clinical notes and records $ 250.00 subsection 4(4)
process serving fees $ 290.29 subsection 4(4)
summons to witness fees $ 68.90 section 5
travel expenses $ 134.00 section 6
total $1,528.80
Accordingly, Belair's expenses are allowed as follows:
Counsel Fees $7,790.63
G.S.T. on Counsel Fees $ 545.34
Disbursements $1,528.80
$9,864.77
February 7, 2006
Lawrence Blackman Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 24
FSCO A04-000422
BETWEEN:
PHILIP SOOBRIAN Applicant
and
BELAIR INSURANCE COMPANY INC. Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Soobrian shall pay Belair Insurance Company Inc. its expenses of this arbitration proceeding, fixed in the amount of $9,864.77, including G.S.T.
February 7, 2006
Lawrence Blackman Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.