Martin Adusei-Peasah v. TTC Insurance Company Limited, 2007 ONFSCDRS 210

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2007 ONFSCDRS 210

FSCO A05-000865

BETWEEN:

MARTIN ADUSEI-PEASAH

Applicant

and

TTC INSURANCE COMPANY LIMITED

Insurer

Before: Joyce Miller

Heard: July 6, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Murray Tkatch for Mr. Adusei-Peasah

Laura Qaqish for TTC Insurance Company Limited

Issues:

The Applicant, Martin Adusei-Peasah, was injured in a motor vehicle accident on March 15, 2004. On May 23 and 24, 2007, I dealt with a Preliminary Issue as to whether Mr. Adusei-Peasah was involved in an “accident” under the Schedule.¹ In a decision dated February 2, 2007, I ordered that Mr. Adusei-Peasah was injured as a result of an “accident” as defined in subsection 2(1) of the Schedule, while reserving on the issue of expenses

The issue in this further hearing is:

Is Mr. Adusei-Peasah entitled to his expenses incurred in respect of this arbitration hearing?

Result:

Mr. Adusei-Peasah is entitled to his expenses for Mr. Tkatch’s legal services in the amount of $12,900 plus GST, and disbursements in the amount of $253.92 inclusive of GST.
Mr. Adusei-Peasah is entitled to his expenses for this assessment expense hearing and the bias motion hearing in the amount of $1,000 inclusive of GST.

BACKGROUND:

At the Preliminary Issue hearing on May 23, 2006, with the agreement of counsel², for the sake of expediency the hearing was bifurcated so that only the preliminary issue as to whether Mr. Adusei-Peasah was injured as a result of an accident would be heard.³

The decision on the preliminary issue was issued on February 2, 2007. A four-day hearing was scheduled for February 25, 26, 27 and 28, 2008 on the remaining issues of the bifurcated hearing.

After my decision was issued the FSCO file shows a record of the following correspondence:

On February 7, 2007, counsel for TTC wrote to me noting that she is not copying Mr. Adusei-Peasah’s counsel and asking that I do not sit on the remaining issues in the arbitration hearing, because as TTC counsel she had heard that I had reported having an accident on the TTC.

In accordance with Commission policy, this letter was immediately brought to Acting Senior Arbitrator Sapin’s attention.

On February 15, 2007, Acting Senior Arbitrator Sapin wrote to TTC’s counsel advising that assignment of an arbitrator to a particular file must be raised directly with the Senior Arbitrators. She also stated “Arbitrator Miller is not assigned to hear this matter in April.”⁴
On February 21, 2007, in light of Mr. Adusei-Peasah’s success at the Preliminary Issue, Mr. Adusei-Peasah’s counsel, Mr. Murray Tkatch, sent TTC its Bill of Costs.
On February 22, 2007, Mr. Tkatch wrote to me that TTC disputed Mr. Adusei-Peasah’s Bill of Costs and advises that the parties are available to speak to me on this matter.
On March 6, 2007, a Notice of Assessment of Expenses was sent to the parties for a hearing on May 23, 2007.
On March 13, 2007, counsel for TTC wrote to Acting Senior Arbitrator Sapin, without copying Mr. Adusei-Peasah’s counsel, that the expense hearing should be put off to be heard by the hearing arbitrator as being a more productive way of dealing with the issue of costs in the preliminary hearing.
On April 24, 2007, counsel for TTC wrote to the case administrator, without copying Mr. Adusei-Peasah’s counsel, stating that she had not heard back from Acting Senior Arbitrator Sapin⁵ and stated:

May I suggest to the Commission that since Arbitrator Miller is no longer associated with this matter, it would be sensible for the arbitrator who hears the substantive matter to deal with all cost issues at the end of the day instead of attempting to find someone to deal with these costs who was not involved in the original hearing?

The Case Administrator referred the April 24, 2007 letter to Senior Arbitrator Seife.

On May 9, 2007, TTC’s counsel wrote to Senior Arbitrator Seife, without copying Mr. Adusei-Peasah’s counsel, referring to a telephone conversation she had had with Senior Arbitrator Seife on May 7, 2007. In this letter she stated:

I am somewhat concerned to learn that although I have long since had written confirmation that Arbitrator Miller recused herself from continuing in this matter (affirmed by Senior Arbitrator Sapin), you are changing that decision.⁶

On May 10, 2007, Senior Arbitrator Seife wrote to TTC’s counsel wherein he stated:

As I indicated in my detailed voice mail message to you on May 7, 2007, the proper time and place to raise the issue of bias is at the hearing, before the arbitrator and in the presence of the other side.

On May 14, 2007, TTC’s counsel wrote to Mr. Adusei-Peasah’s counsel requesting an adjournment of the expense hearing on May 23, 2007 for personal reasons. Significantly, no mention was made in the letter of May 14, 2007 that she was corresponding with FSCO to have me removed as arbitrator in the case, or that she intended to raise an issue of bias at the expense hearing. However, she does state that she has attempted to have the costs hearing put over to the end of the arbitration hearing and asks Mr. Adusei-Peasah’s counsel if he would agree to this suggestion. There is no response in the file to this request, but the record shows that the adjournment request was not contested.
On May 22, 2007, a Notice of Hearing was issued to all parties stating:

At the request of Ms. Norma Priday, on consent of all parties, the assessment of expenses will be held before Joyce Miller, Arbitrator, on Friday, July 6, 2007...

On June 29, 2007, late in the afternoon, three full working days before the expense hearing, TTC served Mr. Adusei-Peasah’s counsel a Notice of Motion for my recusal on the basis of bias and other relief, with a copy to FSCO, to be heard at the expense hearing on July 6, 2007.
On July 3, 2004, two full working days before the expense hearing, TTC served Mr. Adusei-Peasah’s counsel with its Factum for the Motion and its Book of Authorities, with a copy to FSCO.
Neither the Motion nor the factum were served in a timely manner pursuant to Rule 67.5 of the Dispute Resolution Practice Code which allows the Respondent 10 days to file his response.

ADJOURNMENT REQUEST

On the morning of the hearing, Mr. Adusei-Peasah’s counsel provided a succinct, two and a half page response to TTC’s motion, along with four short decisions, which included one decision already provided by TTC in its book of authorities. Counsel for the TTC requested some time to review Mr. Adusei-Peasah’s response and the cases. This was granted to her.

TTC’s counsel took an hour and fifteen minutes to study the documents. She then stated that she needed several more days to review the response as it was delivered too late in the process. Accordingly, she requested an adjournment of the motion and the expense hearing.

Mr. Adusei-Peasah opposed the adjournment for the following reasons.

Mr. Adusei-Peasah submits that he agreed to an adjournment for the May 23, 2007 expense hearing because TTC’s counsel stated that she wanted to appear at the expense hearing and was unable, for personal reasons, to be present at the expense hearing. Mr. Adusei-Peasah submits that at the time of the first adjournment, he was never advised that TTC was contemplating making an allegation of bias.

Mr. Adusei-Peasah submits that a second adjournment in this expense hearing is unreasonable. He argues that TTC has raised the bias issue much too late in the process. He points out that since TTC alleges that it had bias concerns as far back as at the hearing in May 2006, then that would have been a proper time to have either raised its concern or to have applied to the Superior Court for a stay of proceedings. It did neither.

Mr. Adusei-Peasah submits that since the preliminary issue had been decided and TTC has chosen not to appeal the decision, I am functus on the issue of bias. Accordingly, Mr. Adusei-Peasah submits it is much too late in the process for TTC to make a claim of bias.

Mr. Adusei-Peasah submits that he is fully prepared to proceed on the expense hearing and this second adjournment should not be granted.

FINDINGS

For the following reasons I declined to grant the adjournment and not to hear the motion on bias.

Counsel who represented TTC at the Preliminary Issue hearing provided an affidavit in respect of the motion on bias. The allegations can be summed up in the following three points.

TTC counsel alleges that at a break in the proceedings at the Preliminary Issue hearing in May 2006, I told her “that buses of a certain design in the TTC fleet were unsafe.”
TTC counsel alleges that as counsel for TTC she became aware that I had reported an incident [on October 19, 2006] on a TTC bus. She states that this accident was confirmed and there was no issue in this regard. Although TTC counsel indirectly acknowledges that I made no claim against TTC, either for accident benefits or in tort, she nevertheless alleges that the limitation periods are still open and I can still make a claim.
TTC counsel alleges that “Co-incidentally, I also saw Arbitrator Miller in the lobby of the building where the Insurer is located when she came to speak to an adjuster. She once again expressed to me her concerns with the design and safety of certain of our vehicles.”

It is clear that TTC was aware of its allegations in the time period that included the Preliminary Issue hearing up until my decision was issued. TTC, however, did not raise the issue of bias at any time in this period.

After I issued my decision in favour of Mr. Adusei-Peasah, TTC could have appealed my decision, pursuant to Rules of the Dispute Resolution Practice Code, as the preliminary issue finally decided the issue in dispute. It chose not to.

Two weeks after my decision was issued, Mr. Adusei-Peasah presented his Bill of Costs to TTC and the parties agreed to an Assessment Expense hearing for May 23, 2007. At no time did TTC advise Mr. Adusei-Peasah that it had any concerns regarding bias on my part. Neither did TTC advise Mr. Adusei-Peasah that it was corresponding with FSCO trying to have me removed as arbitrator on both the substantive issue, which I was not seized on, and the expense issue which I was seized on.

As noted above, on May 14, 2007 TTC requested an adjournment of the expense hearing. Significantly, TTC, in its adjournment request, did not advise Mr. Adusei-Peasah that it was seeking to have me removed as arbitrator at the expense hearing for bias. Instead, TTC proposed that the expense hearing be deferred to the end of the arbitration on the substantive issue. Mr. Adusei-Peasah did not agree to this latter suggestion.

I find it significant that TTC chose not to disclose to Mr. Adusei-Peasah until a week before the adjourned expense hearing was to commence that it was planning to raise the issue of bias that it has known about since the preliminary issue hearing. Not only was there a lengthy delay in raising the issue of bias, in addition TTC did not serve the motion in a timely fashion pursuant to the Rules.

Rule 67.5 of the Dispute Resolution Practice Code allows that a Respondent be given 10 days to respond to a motion application. By serving the Notice of Motion on Mr. Adusei-Peasah’s counsel late in the afternoon before a civic holiday weekend, TTC gave Mr. Adusei-Peasah’s counsel only three full working days before the hearing to respond to its voluminous materials.

It should be noted that TTC is not claiming I was biased at the preliminary issue hearing, when the alleged allegations arose and the decision should be void ab inito. Instead, TTC is claiming I can be biased at the expense hearing with respect to events that occurred at the time of the preliminary issue hearing.

I agree with Mr. Adusei-Peasah’s submission that if TTC had concerns of bias, it should have raised this issue in a timelier manner.

From TTC’s allegations, noted above, it is clear that the appropriate time to have raised the bias issue was before me, either at the preliminary issue hearing, or at any time before my decision was issued. TTC had ample time and opportunity to properly raise the issue of bias. It did not do so. Nor did TTC provide any explanation or justification as to why it delayed for 14 months to bring the motion for bias about events that took place at the time of the preliminary issue hearing.

In the case of Authorson (Litigation guardian of) v. Canada (Attorney General),⁷ the Divisional Court held that a delay of 2½ months in bringing a bias motion, without a cogent explanation, was inappropriate and dismissed an appeal by the Crown that had brought a bias complaint “on the basis of non-timeliness of the complaint.”

In making this finding the Divisional Court relied on the Supreme Court of Canada case of R. v. Curragh⁸ where both the majority and dissent are in agreement that motions for disqualification are to be brought promptly. In Curragh, the majority stated “We accept that in order to maintain the integrity of the court’s authority such allegations must, as a general rule, be brought forward as soon as it is reasonably possible to do so.”

Accordingly, on the facts of this case, I find that by raising the bias issue, over a year after the allegations arose, on the eve of the adjourned expense hearing, without giving proper notice to Mr. Adusei-Peasah pursuant to the Rules, TTC is not entitled to an adjournment of the expense hearing nor a hearing on the motion of bias.

EXPENSE ISSUE

In awarding expenses, an arbitrator is only to consider the criteria enumerated in section 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended, which are:

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.

The first criterion, the degree of success in the outcome of the proceeding, is the only relevant criterion to be considered in this expense hearing. Mr. Adusei-Peasah was completely successful in the Preliminary Issue. Accordingly, I find that Mr. Adusei-Peasah is entitled to his reasonable expenses in this arbitration.

Mr. Adusei-Peasah’s Submissions on Costs

Mr. Adusei-Peasah submits that following my decision on the preliminary issue, which was a final issue on the issues in dispute, he sent his Bill of Costs to TTC on February 21, 2007. Mr. Adusei-Peasah submits that the preliminary issue decision is not under appeal or review and TTC did not raise any issues with respect to his account. Accordingly, Mr. Adusei-Peasah submits that his expenses for the preliminary issue hearing total $14,929.62 for legal fees and disbursements.

In addition, Mr. Adusei-Peasah submits that I had ruled that the bias issue was past the time when it should have been brought before me. Accordingly, he submits he should be awarded $1,000 in costs for the inappropriate motions for which he had to prepare and file materials.

TTC’s Submissions on Costs

TTC submits that the preliminary issue did not stand alone. TTC submits that the preliminary issue hearing could not be separated from the other issues in dispute. Accordingly, TTC submits that it is not practical to decide the issue of costs when there is a further arbitration in February 2008 to decide the other issues.

Mr. Adusei-Peasah’s Reply to TTC’s Submissions

Mr. Adusei-Peasah submits that my decision was a final determination to both himself and TTC, with both having a right of appeal. At this time there is no appeal or review pending. Mr. Adusei-Peasah submits that the bias motion was not raised in respect to the expense hearing scheduled in May. The May expense hearing was adjourned to July so that TTC’s counsel could attend at the hearing. She chose not to attend.

Mr. Adusei-Peasah submits that TTC took the chance that the motion for bias would stop the expense hearing, which it did not. Moreover, TTC took a chance in being wrong in law when they did not appeal the Preliminary Issue decision. Mr. Adusei-Peasah submits that the next hearing is on different issues and before a different arbitrator, with costs that will flow from this second arbitration with those different issues. Mr. Adusei-Peasah submits that TTC took its chances and I am not bound by the wrong decisions that TTC made.

FINDINGS

I agree with Mr. Adusei-Peasah’s submissions. The arbitration was bifurcated with agreement on the part of both counsel.⁹ Rule 51.2 of the Dispute Resolution Practice Code states: “An appeal may be rejected if: (c) it is from a preliminary or interim order that does not finally decide the issues in dispute.”

The preliminary issue hearing in the present case made a final determination as to whether or not Mr. Adusei-Peasah was on the bus at the time of the accident. In my decision of February 2, 2007, I found as a fact that Mr. Adusei-Peasah was on the bus and accordingly was involved in a car accident. After my decision was issued, TTC had the option to appeal the decision. It did not.

While there are situations where the expense issue is deferred until after the arbitration on the substantive issue is heard, I do not find it appropriate to do so on the facts of this case. There are situations where the preliminary issue arbitrator remains seized to hear the substantive issues. In that situation, it would be practical to leave the expenses until the arbitration is complete. This is not the situation in the present case. I will not be presiding at the arbitration hearing. Part of assessing expenses on a hearing involves evaluating the conduct of the parties and the complexity of the hearing as factors in assessing costs. This can only best be done by the arbitrator who has had carriage of the preliminary issue where a final determination was made.

Accordingly, as there is no appeal or review underway, I find that I have the jurisdiction to deal with the issue of expenses.

ASSESSMENT OF EXPENSES

TTC has had Mr. Adusei-Peasah’s Bill of Costs since February 21, 2007. Nevertheless, although given ample opportunity, TTC chose not to respond to the Bill of Costs or provide any submissions, even in a precautionary way. In short, TTC did not oppose Mr. Adusei-Peasah’s Bill of Costs, although it had asked for the assessment of expenses hearing.

In the decision of Henri and Allstate Insurance Company,¹⁰ Arbitrator Makepeace outlined a number of general principles that have emerged from the arbitration decisions with regard to the assessment of arbitration expenses. These principles include the following:

The overriding consideration in fixing arbitration expenses is reasonableness.
A line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.

In deciding the issues in this expense hearing, namely, what is the amount of legal fees, hourly rate and disbursements that Mr. Adusei-Peasah is entitled to for the services rendered by his counsel, I will adhere to the above principles of “reasonableness” and “global assessment.”

(1) Legal Fees

(a) Mr. Tkatch

Pursuant to section 3 of the Expense Schedule, legal fees are payable for the preparation and attendance at an arbitration as well as for services performed before and subsequent to an arbitration hearing.

In the present case, Mr. Adusei-Peasah claims 86 hours of legal services at $150 per hour. The legal service includes preparation for arbitration, attendance at the arbitration and reviewing transcripts and notes; preparing and dictating submissions and facts; reviewing file and changes; reviewing TTC response brief and preparing reply submissions.

As noted above, I have received no submissions from TTC disputing the number of hours or the hourly fee. I have reviewed Mr. Adusei-Peasah’s Bill of Costs and have no reason to reduce either the hours claimed or the amount per hour, given the high experience level of Mr. Tkatch.

Accordingly, I find that Mr. Adusei-Peasah is entitled to 86 hours at the rate of $150 an hour plus GST for Mr. Tkatch’s legal services.

(b) Michael Rubin

Mr. Adusei-Peasah claims 9 hours legal fees for Michael Rubin. The legal service was provided for Mediation and, accordingly, is not allowed.

Disbursements

Mr. Adusei-Peasah claims $245.20 and $8.72 GST for disbursements that include: $100 filing fee, $100 Courier expenses and $45.20 photocopying and binding of materials. I find these expenses to be reasonable and are allowed. Accordingly, I find that Mr. Adusei-Peasah is entitled to disbursement expenses in the amount of $253.92 inclusive of GST.

Expenses regarding the bias motion and assessment hearing

Mr. Adusei-Peasah was successful in this assessment expense hearing and defending TTC’s motion for bias and adjournment request. Although TTC had requested this assessment hearing and was given ample opportunity to present its submissions on the assessment of Mr. Adusei-Peasah’s Bill of Costs, it chose not to do so. For these reasons, I find that TTC has put Mr. Adusei-Peasah through an unnecessary expense hearing in having to defend its bill of costs and a frivolous bias motion. Accordingly, I agree with Mr. Adusei-Peasah’s submissions that he be awarded $1,000 in costs for the assessment of expenses hearing and the bias motion hearing.

October 31, 2007

Joyce Miller

Arbitrator

Date