Neutral Citation: 2008 ONFSCDRS 23 FSCO A05-002463

BETWEEN:

NICOLE TYRELL Applicant

and

RBC GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Richard Feldman Heard: By telephone conference call on November 30, 2007

Appearances: Adam Ezer, student-at-law, for Ms. Tyrell Tricia McAvoy, counsel, for RBC General Insurance Company

Issues:

The Applicant, Nicole Tyrell, was injured in a motor vehicle accident on December 19, 2004. In a decision dated September 27, 2007, I dealt with her claims for statutory accident benefits under the Schedule¹ and with the Insurer’s claim for repayment of certain benefits it had paid to Ms. Tyrell. I made the following orders, while reserving on the issue of expenses:

Ms. Tyrell’s claims for accident benefits are denied.
RBC is entitled to repayment of caregiver benefits in the amount of $600.00, plus interest thereon in accordance with section 47(6) of the Schedule.

The issue in this further hearing is:

Is RBC entitled to its expenses incurred in respect of this arbitration hearing?

Result:

The Applicant shall pay to RBC its expenses in the amount of $2,000.00.

EVIDENCE AND ANALYSIS:

Subsection 282(11) of the Insurance Act² provides that an arbitrator may award to the insured person or the insurer, according to the criteria (currently six criteria) prescribed by the regulations, all or part of such expenses incurred in respect of an arbitration proceeding, to the maximum set out in the regulations.

The six criteria are as follows:

Each party’s degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with [the regulations].
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.
Whether the insured person refused or failed to submit to an examination as required under section 42 of the Schedule or refused or failed to provide any material required to be provided under subsection 42(10) of the Schedule.

RBC was completely successful in its defence of this Application and was partially successful on its claim for repayment of caregiver benefits. RBC is seeking an order that the Applicant pay its expenses of this proceeding in the total amount of $5,674.48 (consisting of $3,101.38 in fees and $2,573.10 in disbursements, both inclusive of GST).

With respect to the hearing of the merits of this application, because the Applicant’s expert witness apparently refused to co-operate, I ended up hearing only the testimony of the Applicant herself (which took about one-half day on April 23, 2007). I then dealt briefly, on April 25, 2007, with a contested adjournment request by the Applicant (which I granted) and, ultimately, the parties agreed that there was no need for the hearing to be reconvened and they submitted their closing arguments in writing.

There were no written offers to settle. No novel issues were raised in the proceeding. There was no allegation that the Applicant refused to attend an examination required under section 42 of the Schedule.

I do not find that the conduct of a party or a party’s representative tended to prolong, obstruct or hinder the proceeding. I do not attribute the delay caused by the failure of Dr. Super to appear at the hearing to any fault on the part of the Applicant or her representative. Although RBC was only partially successful on its claim for repayment of caregiver benefits (which shall be discussed later in this decision), the issue of repayment took up very little time during the hearing and did not tend to prolong, obstruct or hinder the proceeding.

Similarly, I do not find that any aspect of the claim by either party was improper, vexatious or unnecessary.³

Therefore, of the six criteria that I must consider pursuant to the Expense Regulation, I find that the only relevant consideration in this case is each party’s degree of success in the outcome of the proceeding.

The Applicant was completely unsuccessful on her Application. RBC was completely successful in its defence of this Application but only partially successful on its own claim for repayment (RBC was seeking repayment of $1,100 but was awarded only about one-half of that amount).

Based upon each party’s degree of success in the outcome of the proceeding, RBC is entitled to most, but not necessarily all, of its reasonable expenses related to this proceeding.

RBC has claimed 8.5 hours for attendance before me, 26 hours for preparation by Ms. McAvoy plus 8.5 hours of preparation by her clerk. The Applicant does not take issue with the hours claimed for attendance before me but does take issue with the amount of preparation time claimed given the simple nature of this case and the brevity of the proceedings. Since the Applicant did not warn RBC in advance of April 25, 2007 that Dr. Super would not be attending on April 25, 2007, it was reasonable for Ms. McAvoy to spend time preparing to cross-examine Dr. Super. It was also reasonable for her to prepare for her direct examination of Dr. Kazemi, who was expected to testify on the afternoon of April 25, 2007. Finally, time was spent by counsel for RBC in preparing the post-hearing written submissions. I find that, subject to other comments that follow and bearing in mind the usual amount of time permitted by the Commission for preparation in relation to the time spent at the hearing⁴, a reasonable amount of time to have spent in relation to this entire proceeding is 20 hours (for both preparation and attendance). At the hourly rate claimed by Ms. McAvoy⁵, this would be equivalent to approximately $1,700.00 (inclusive of GST).

With respect to the disbursements claimed by RBC (set out in its Bill of Costs), I agree with Mr. Ezer that RBC has no right under the Expense Regulation to claim the cost ($1,049.40 plus GST) of a court reporter.⁶

RBC also requested reimbursement for an expense of $700.00 purportedly charged by Dr. Kazemi for holding himself available to testify on April 25, 2007. With respect to this expense, RBC did not provide an invoice from Dr. Kazemi to further explain this expense or how the amount of $700.00 was calculated. From the submissions of Ms. McAvoy, it appears that this expense was not related to preparation of Dr. Kazemi to testify. He did not attend at the hearing and he never testified. Consequently, this expense cannot be claimed under subsection 5(3), (4) or (5) of the Expense Regulation.⁷ While it is conceivable that, in the right circumstances, such an expense might be claimed as “other out-of-pocket expenses in furtherance of the arbitration” (as that term is used in section 4, paragraph 4 of the Expense Regulation), in the absence of further particulars concerning the nature of this particular expense, I am not persuaded that the Insurer is entitled to this expense.

Therefore, of the almost $2,600.00 claimed by RBC in disbursements, I find that RBC is only entitled to approximately $700.00, inclusive of GST, for expenses related to: postage/courier; the cost of obtaining medical records; photocopying; and conduct money.

In cases such as this, it is inappropriate to conduct a line-by-line analysis of a party’s Bill of Costs. The parties have agreed that this is an appropriate case for the fixing of expenses at a global amount that includes fees, disbursements and GST.

As I have pointed out, if the Applicant had been completely successful on this application, I might have awarded to RBC approximately $2,400.00, inclusive of fees, disbursements and GST.⁸ I find, however, that it is appropriate in this case to reduce this amount to reflect the following facts:

RBC was not completely successful on its claim for repayment of caregiver benefits; and
With respect to the expense hearing itself:

(a) The Applicant was successful in having RBC’s claim for expenses substantially reduced.

(b) Contrary to Rule 79 of the Dispute Resolution Practice Code, RBC’s representative made no effort to communicate with the Applicant’s representative either prior to requesting the expense hearing or after the date was set for the expense hearing but prior to the commencement of the expense hearing. Thus, RBC made no effort to try to agree with the Applicant on the issue of RBC’s entitlement to or on the amount of the expenses of the proceeding. RBC also failed to produce supporting documentation (invoices, etc.) prior to the expense hearing. Had RBC followed the procedures outlined in Rule 79, the expense hearing may have been unnecessary or the issues may have been narrowed.

(c) The Applicant, through her representative, requested her expenses of the expense hearing. Due to RBC’s mixed success on the expense hearing and its failure to take reasonable steps that could have narrowed the issues or eliminated the need for an expense hearing, I find that the Applicant is entitled to her expenses of the expense hearing. I shall set off the expenses of the expense hearing owed to the Applicant against the amount that the Applicant would otherwise be ordered to pay RBC for its expenses of this arbitration as a whole. Given that the expense hearing only lasted for one hour and also given that Mr. Ezer has not yet been called to the Bar, however, the amount of this set-off (i.e., reduction) shall be modest.

In light of all of the foregoing, I find that RBC is entitled to be paid its expenses of this proceeding and I fix those expenses in the amount of $2,000.00 (inclusive of all legal fees, disbursements and GST).

February 19, 2008

Richard Feldman Arbitrator

Date

Financial Services Commission of Ontario