Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 18

FSCO A03-000956

BETWEEN:

YAW POKU DWUMAAH

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

DECISION ON ASSESSMENT OF EXPENSES

*Calculation error corrected on June 4, 2007, on pages 2, 6 and Arbitration Order, in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedure Act.

Before:

Robert A. Kominar

Heard:

July 11, 2006, by teleconference arranged by the Financial Services Commission of Ontario in Toronto.

Appearances:

Majid Yazdani William J. McCorriston for RBC General Insurance Company Mr. Dwumaah did not appear

Issues:

The Applicant, Yaw Poku Dwumaah, alleged that he was injured in a motor vehicle accident on November 29, 2001. As a result of a hearing which was held on May 3, 4 and 5, 2004, I dealt with his claims for statutory accident benefits under the Schedule¹ In my decision of May 5, 2005, I also made the following order related to expenses:

RBC is entitled to its expenses in this hearing. The parties shall have 30 days to agree on expenses – if they cannot agree, an expense hearing can be arranged to determine the quantum of expenses and who shall pay them.

The issue in this further hearing is:

What amount of expenses is RBC entitled to in the arbitration?
Who between Mr. Dwumaah and Dr. Yazdani should be responsible for paying RBC's expenses?

Result:

Mr. Dwumaah shall pay RBC the amount of $13,922.51, inclusive of GST, as its expenses in this arbitration hearing.

EVIDENCE AND ANALYSIS:

In my decision on the merits of this arbitration, my finding can be summarized by saying that I concluded that Mr. Dwumaah materially misrepresented to RBC that he was involved in an automobile accident on November 29, 2001 and, therefore, I concluded that he was not entitled to any of the statutory accident benefits he had claimed. In addition to dismissing his claims in the arbitration, I ordered that RBC was entitled to its expenses in the matter.

The parties were encouraged to attempt to resolve the issue of quantum of expenses within 30 days after my decision was released. They were also encouraged to attempt to resolve whether Dr. Yazdani should be responsible for paying some or all of the expenses to RBC.

The parties were unable to reach a settlement of either of these two issues and RBC requested a hearing to assess the quantum of expenses and who should pay them. There was some difficulty in arranging a mutually acceptable date for an assessment of expenses. A telephone conference was held on July 11, 2006 at 9:00 a.m, at which time Mr. McCorriston and Dr. Yazdani made submissions on the issue of expenses. Mr. Dwumaah was sent independent notice of the expense hearing but did not participate, nor did he contact the Financial Services Commission with respect to it. I am satisfied that he had proper notice of the hearing.

Mr. McCorriston submitted an itemized Bill of Expenses, dated October 18, 2005, setting out the amounts being claimed for fees and disbursements in the arbitration. After hearing submissions from Mr. McCorriston and Dr. Yazdani and reviewing Mr. McCorriston's account, I find that the Bill of Expenses, as submitted, is both reasonable and in accord with the expense provisions of the Dispute Resolution Practice Code, Fourth Edition – Updated October 2003 (the "Code").

Dr. Yazdani's submissions on the quantum of expenses related to questioning a claim for a disbursement of $5.70 for legal research costs as well as a claim for $578.00 for photocopying costs. Mr. McCorriston advised that cases were downloaded in preparation of the hearing and this accounts for the $5.70 disbursement. I am satisfied that this item falls within my discretion to award out-of-pocket expenses incurred in furtherance of the arbitration, pursuant to subsection 4(2) of the Expense Regulation, Regulation 664, R.R.O. 1990, as amended. Mr. McCorriston further advised that photocopies were charged at the rate of $0.25 per copy. I find this to be well within current rates for photocopying. Apart from these inquiries regarding disbursements, Dr. Yazdani did not question the appropriateness of Mr. McCorriston's account. Mr. McCorriston did undertake to provide Dr. Yazdani with evidence that the disbursements were actually incurred. I am prepared to accept Mr. McCorriston's statement that all of the disbursements claimed were actually incurred as set out in his Bill of Costs.

Mr. McCorriston requested that I recognize his more than twenty years of litigation practice and approve his billing his time at the rate of $150.00 per hour, as allowed for in Rule 78.1 of the Code. In my view this is a reasonable request and I exercise my discretion to approve an hourly rate of $150.00 for Mr. McCorriston's time spent in this matter.

In my decision, I raised the question of whether Dr. Yazdani should be held liable for paying some portion of the arbitration expenses pursuant to subsection 282(11.2) of the Insurance Act. This was primarily motivated by my finding that Mr. Dwumaah's claims were so outlandish and implausible that I questioned whether a competent legal representative would have brought them forward to an arbitration.

Dr. Yazdani's submissions on this point were that he was contacted by Mr. Dwumaah after he had been working with another legal representative and was asked whether he would represent him at the arbitration. He apparently believed that there was more merit to Mr. Dwumaah's view of the facts than I concluded. In essence, Dr. Yazdani's argument is that he represented Mr. Dwumaah in good faith and that he should not be held personally accountable for expenses. As noted above, although he was served with notice of this hearing, Mr. Dwumaah did not choose to participate or make any representations regarding the matter.

Mr. McCorriston submitted that, notwithstanding the significant difficulties he experienced in communicating with Dr. Yazdani throughout the file, subsection 282(11.2) of the Insurance Act is a drastic remedy and the discretion to use it should be exercised carefully by an arbitrator. He was candid in submitting that it is difficult to find that Dr. Yazdani's actions are properly captured by subparagraph 282(11.2)(b), which would require a finding that Dr. Yazdani "caused expenses to be incurred without reasonable cause by advancing a frivolous or vexatious claim on behalf of the insured person."

I found that Mr. Dwumaah's claims were frivolous and quite likely vexatious as well. However, I agree with Mr. McCorriston that I do not have before me any evidence from either RBC or Mr. Dwumaah on which to base a finding that Dr. Yazdani "caused" these claims to be advanced, as opposed to Mr. Dwumaah's instructing Dr. Yazdani in the matter. I take Mr. Dwumaah's choice not to participate in this expense hearing to constitute some evidence to the contrary.

Mr. McCorriston also noted that much of the time expended in this hearing arose from RBC’s decisions to present a significant amount of evidence to support their view that there were material misrepresentations made by Mr. Dwumaah and Dr. Yazdani did not actually proffer much, if any, evidence in support of any of Mr. Dwumaah’s claims. I believe that this is an important factor to weigh in deciding the issue of Dr. Yazdani’s potential liability for expenses.

In hindsight, RBC might have simply argued that Mr. Dwumaah and Dr. Yazdani never presented sufficient evidence during the hearing to meet the civil burden of proof and the result on the merits of the case would have been the same. In fact, I commented on this glaring lack of evidence on the issues in dispute in my decision. However, RBC chose to go further and to tender expert evidence which ultimately persuaded me that serious and material misrepresentations had been made by Mr. Dwumaah which justified their blanket denial of all of his claims.

As a result, I find that it is reasonable to give the benefit of the doubt to Dr. Yazdani and I find that, in the circumstances, I do not have sufficient evidence before me to hold him personally accountable to pay any of the legal expenses owing to RBC. Although I still have serious reservations about the nature of the legal representation in the hearing, it is important not to project Mr. Dwumaah’s intentions onto Dr. Yazdani without some evidence to support the conclusion that the legal representative was the motivating force that led to this hearing going forward.

In conclusion, I find that Mr. McCorriston's Bill of Expenses is in accord with the Expense Regulation and is reasonable in the amount of time claimed both for preparation and attendances at the hearing. The disbursements and expert witness fees also comply with the Regulation.

Therefore Mr. Dwumaah shall pay to RBC the sum of $13,922.51 for fees and disbursements in this arbitration, inclusive of GST.

February 5, 2007

Robert A. Kominar Arbitrator

Date