Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 45
FSCO A03-001085
BETWEEN:
V. LEONA COOK
Applicant
and
PILOT INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
Robert A. Kominar
Heard:
By telephone conference call on August 31, 2005.
Appearances:
Annette Casullo for Mrs. Cook
Tricia McAvoy for Pilot Insurance Company
Issues:
The Applicant, V. Leona Cook, was injured in a motor vehicle accident on October 28, 2001. In a decision dated May 9, 2005 , I dealt with her claims for statutory accident benefits under the Schedule.1 I made the following order, while reserving on the issue of expenses:
- Mrs. Cook's claims for non-earner benefits and interest are dismissed.
The issue in this further hearing is:
- Is either party entitled to their expenses incurred in respect of this arbitration hearing, and if so, in what amount?
Result:
- Pilot is entitled to its expenses in the arbitration, assessed in the amount of $4,085.16 inclusive of GST.
EVIDENCE AND ANALYSIS:
Mrs. Cook applied for arbitration claiming non-earner benefits after a motor vehicle accident which occurred on October 28, 2001. In a decision dated May 9, 2005, I found that Mrs. Cook was not entitled to non-earner benefits and dismissed her application for arbitration. In that decision I allowed the parties 30 days to attempt to resolve the issue of expenses, otherwise an expense hearing could be convened to determine entitlement to expenses and assess the amount of them. The parties were unable to resolve the issue of expenses and I heard submissions from both counsel on August 31, 2005. In addition, both counsel provided me with itemized Bills of Costs for their work in the arbitration.
I will say at the outset that I had hoped that the parties could come to an agreement on expenses in this case, and in fact I took the extraordinary step of arranging for them to participate in a settlement discussion with another arbitrator on the expense issue. Since it is clear that the parties cannot come to any agreement I am required to decide the matter.
As a statutory decision maker, an arbitrator at FSCO is restricted to awarding expenses in accordance with the criteria in the Dispute Resolution Practice Code, 4th edition — Updated October 2003. In coming to a decision, an arbitrator is also restricted to consider the criteria for an award of expenses which are set out in the Expense Regulation, Regulation 664, R.R.O. 1990, as amended.
My decision based on each of the criteria in the Expense Regulation is as follows:
(a) each party's degree of success in the outcome of the proceeding
Mrs. Cook was completely unsuccessful in her claims for non-earner benefits.
(b) any written offers to settle made in accordance with Subsection (3)
No such offers to settle were drawn to my attention by the parties.
(c) whether novel issues are raised in the proceeding
Ms. Casullo argued that Mrs. Cook’s claim to non-earner benefits were novel, in that they involved an assessment of her challenges in continuing to practice her religious faith in the same way she had before the accident. There is no doubt that the facts of Mrs. Cook’s case were unique in this regard, at least as far as recorded decisions are concerned. On the other hand there was nothing novel about applying the law to those unique facts, and this has to be done in every adjudicated case. There were no novel legal interpretations of the Schedule involved in this case. Rather, my findings were that Mrs. Cook had not established a factual basis robust enough to meet her burden of proof related to her claims to non-earner benefits.
The criterion I have to consider is whether any novel "issues" were involved in the arbitration. Issues in arbitration can be factual, legal, or a mixture of both. In this case I find that there were novel factual issues, such that diligent legal research would not have surfaced any precedents which would reasonably persuade an applicant, one way or the other, of the likely merits of the case. I believe therefore that it was reasonable for Mrs. Cook to ask to have her claim adjudicated and based on the consumer protection context of accident benefit law, as enunciated by the Supreme Court of Canada in Smith v. Co-operators General Insurance Co. 2002 SCC 30, [2002] 2 S.C.R. 129 she should not be penalized excessively in costs for failing to persuade me on the facts that she met the test for non-earner benefits. On the facts, Mrs. Cook was ploughing novel ground. It is also well known that the test for non-earner benefits is quite stringent and it is often challenging to make a prediction as to whether the test has been met in any given case.
Given that my ultimate finding here is that Pilot is entitled to its reasonable expenses in this arbitration, I also find that an appropriate discount of otherwise reasonable expenses, based on the novelty of the factual situation here, is 40%.
(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
This criterion is inapplicable in this arbitration as neither party prolonged, obstructed or hindered the progress of the proceeding.
(e) whether any aspect of the proceeding was improper, vexatious or unnecessary
Based on my findings that Mrs. Cook’s claims were founded on a rather unique factual situation which had not been canvassed in the jurisprudence I find that there was nothing unnecessary, let alone vexatious or improper about this proceeding.
The conclusion which I draw from all of the above is that, on balance, Pilot is entitled to its reasonable expenses in the arbitration due to its ultimate success on the issue in dispute. At the end of the day Mrs. Cook was wrong and Pilot was put to an expense it should not have had to bear. However those expenses should be reduced by 40% due to the novelty of Mrs. Cook's factual circumstances supporting her claim to entitlement.
Ms. McAvoy submitted an itemized Bill of Costs. In general I find this Bill reasonable and in accordance with Regulation 664. I allow Pilot its expenses as set out in Ms. McAvoy’s Bill of Costs, subject to the exceptions that I don't allow the disbursement of $387.39 for overnight accommodation, as Pilot chose to retain counsel from Toronto rather than a local lawyer. I also don't allow the amount of $205.50 incurred for the court reporter, as the presence of a court reporter was Pilot’s option and I don't find it reasonable that Mrs. Cook should have to pay for her services.
Thus, I assess the expenses Pilot is entitled to as follows:
Legal Fees (inclusive of GST)
$5,694.74
Allowable Disbursements
$ 941.93
GST on Disbursements
$ 65.94
Conduct Money
$ 106.00
Total Fees and Disbursements and GST
$6,808.61
Less 40% discount
$4,085.16
Therefore Mrs. Cook shall pay to Pilot its expenses in this arbitration assessed in the amount of $4,085.16 inclusive of GST.
March 17, 2006
Robert Kominar Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 45
FSCO A03-001085
BETWEEN:
V. LEONA COOK
Applicant
and
PILOT 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:
- Mrs. Cook shall pay Pilot’s expenses in the arbitration, assessed in the amount of $4,085.16, inclusive of GST.
March 17, 2006
Robert A. Kominar Arbitrator
Date
Footnotes
- The 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.