Neutral Citation: 2008 ONFSCDRS 77 FSCO A06-000145

BETWEEN:

SRITHARAN SELLATHAMBY Applicant

and

RBC GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Joyce Miller Heard: Written submissions received by October 26, 2007 Appearances: Adam Ezer, Student-at-Law, for Mr. Sellathamby Darrell March for RBC General Insurance Company

Issues:

The Applicant, Sritharan Sellathamby, was injured in a motor vehicle accident on October 27, 2003. In a decision dated August 28, 2007, I dealt with his claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

The arbitration is dismissed.
If needed, I may be spoken to the issue of expenses within 14 days of receipt of this decision pursuant to Rule 79 of the Dispute Resolution Practice Code.

The issues in this further hearing are:

Is State Farm entitled to its expenses incurred in respect of this arbitration hearing?
Is Mr. Sellathamby entitled to his expenses incurred in respect of this arbitration hearing?

Result:

Each party is responsible for its own expenses in this arbitration hearing.

SUBMISSIONS

RBC’s Submissions

RBC submits that it is entitled to reimbursement of all expenses incurred in the arbitration hearing on the basis that Mr. Sellathamby’s claim was found to be without merit, and RBC was wholly successful in the arbitration. RBC claims Legal Fees of $6,145.19 plus GST and Disbursements of $1,303.70 plus GST.

Mr. Sellathamby’s Submissions

Mr. Sellathamby submits that, while he was not successful on the single issue in dispute, he should not have to pay the Insurer its expenses and should be awarded his expenses. Mr. Sellathamby submits that “the insurer’s representative was highly obstructive and prolonged and hindered the proceedings.”

Mr. Sellathamby submits that the sole issue in dispute was a simple matter that deserved no more than a one-day hearing. Mr. Sellathamby submits he was prepared to and able to conduct a one-day hearing. He submits that the two dates in March were due solely to the Insurer’s Representative’s conduct. These two extra days were unnecessary and improper.

Mr. Sellathamby provided examples of RBC’s counsel’s actions. These include:

numerous unnecessary preliminary objections at the commencement of the hearing, as well as at the resumption of the hearing;
providing a Respondent’s Arbitration Brief that was not paginated and which caused delays in the proceeding because it was never rectified;
arguing unsuccessfully against Dr. Patel testifying based on an unfound claim that no notice was given;
cross examinations were unnecessarily long and repetitious;
cross examinations prompted many sustained objections due either to non-relevance or the fact that the questions had already been answered in some cases numerous times; and
objecting to Applicant’s counsel utilizing the well recognized “right of reply” in closing argument.

RBC’s Reply Submissions

RBC denies that its representative acted in any manner to obstruct, prolong or hinder the arbitration proceeding. RBC submits that “any and all objections made by Mr. March during examination-in-chief, reply or cross-examination were proper in the circumstances.”

RBC submits that “the preliminary objections were reasonable in the circumstances and one concerned a breach by the Applicant of the DRPC.” RBC submits that the two days in March 2007 to complete the arbitration proceeding were not due solely to the insurer’s representative. RBC submits that if the Applicant had served and filed their materials on time, no objections to their admissibility would have been necessary.

RBC submits that there was nothing mentioned in the arbitration decision regarding any of the issues raised by Mr. Sellathamby in the expense hearing.

RBC submits that Rule 75 of the Dispute Resolution Practice Code (the “Code”) is the relevant criteria to determine both entitlement and quantum of expenses of arbitration. RBC submits that this criteria does not entitle Mr. Sellathamby to his expenses of the arbitration.

THE LAW:

Subsection 282(11) of the Insurance Act provides that:

The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

The criteria for determining entitlement to expenses of an arbitration proceeding are enumerated in section 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended. The criteria 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.
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.

ANALYSIS AND FINDINGS:

With the above criteria in mind, I make the following findings:

Each party’s degree of success in the outcome of the proceeding.

RBC was completely successful in the interim benefits hearing. Mr. Sellathamby was completely unsuccessful.

Any written offers to settle made in accordance with subsection (3).

Neither party made any written offer to settle.

Whether novel issues are raised in the proceeding.

Although there was a dispute as to whether an ANLI Assessment in the amount of $610 could be considered to be a treatment plan, I did not find this to be a novel or significant factual or legal issue that would affect an award of expenses in this case.

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.

As detailed in my analysis below, I found that the conduct of State Farm’s representative tended to prolong, obstruct and hinder the proceedings in this case.

Whether any aspect of the proceeding was improper, vexatious or unnecessary.

As detailed in my analysis below, I find that on the first day of the hearing State Farm’s insistence that their should be a Preliminary Issue hearing on the matter of whether or not an ANLI Assessment was a treatment plan to be completely 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 by subsection 42(10) of that regulation.

This criteria is not relevant to my findings.

For the following reasons, I find that neither party is entitled to their expenses.

The primary purpose of Arbitration as a form of resolving accident benefit disputes is to provide an adjudicative forum which would produce the most just, quickest and least expensive resolution of the dispute. In awarding a party their expenses for arbitration, one of the factors to be considered is to what extent the conduct of either party unnecessarily prolonged the proceedings.

For the following reasons, I find that RBC’s representative unnecessarily obstructed and prolonged the hearing.

But for the actions of RBC’s counsel, this hearing could have easily been completed in one day. This was not a complex proceeding. The issue in dispute was simple and straightforward, namely, whether Mr. Sellathamby was entitled to medical benefits in the amount of $2,598 (including $600 for an ANLI). The evidence was not complicated. Nor were there any complex legal or factual issues in dispute. There were only two witnesses, Mr. Sellathamby and Dr. Patel, a chiropractor. Mr. Sellathamby’s representative was able to carry out his examination-in-chief of each witness between 30 and 40 minutes.

Given the small amount of money in dispute, less than the arbitration filing fee, one would think that RBC would proceed in the most efficient and expeditious manner. It did not.

Counsel for RBC began the hearing by asking that the clinical records of Downsview Health Recovery Centre (“Downsview”) and a report from a chiropractor, Dr. Ventrella, be excluded as Mr. Sellathamby had failed to serve these documents at least 30 days prior to the hearing as set out in Rule 39 of the Code.

After hearing submissions, I excluded the documents. Although the exclusion of these documents would have been very much to the advantage to RBC, instead of proceeding with the arbitration, counsel for RBC began very lengthy submissions arguing that the hearing should be bifurcated and that there should be a separate preliminary issue hearing on whether the $600 ANLI Assessment was a treatment plan or not. Mr. Sellathamby, who was prepared to proceed with the arbitration, opposed this request on the basis that the issue could be dealt with in the context of the hearing as a whole.

I agreed with Mr. Sellathamby’s position. As stated in my decision, I found that the burden of proof rested with Mr. Sellathamby to prove his claim and this would include his claim for the expenses of the ANLI Report. I further found:

…that bifurcating the hearing to rule on one of the expenses being claimed, the ANLI Report, to be inefficient on the facts of this case, as this issue could easily be dealt with in the context of the hearing as a whole. To do otherwise would result in the unnecessary duplication in the presentation of the evidence.

It should be noted that during the submissions on the preliminary issue, other matters were raised by RBC’s counsel which unnecessarily prolonged the proceeding. For example, RBC’s counsel argued quite strenuously that RBC had not received an itemized account of the benefits claimed as required by the pre-hearing letter in respect of the October 31, 2006 pre-hearing.

When Mr. Sellathamby’s counsel pointed out that an itemized list, which also noted the claim for the ANLI Assessment, was provided to RBC on November 3, 2006, RBC’s counsel then argued that the itemized list, which provided a breakdown of the treatment plans, did not provide a breakdown of the individual treatments.

I note the above example, because it makes it very clear that on or about November 3, 2006 RBC’s counsel² was advised of the specific claim for an ANLI Assessment and the amount of the assessment. That being the case, RBC’s counsel had ample time before the arbitration hearing to decide whether he should request the pre-hearing arbitrator to deal with this alleged preliminary matter, as well as the matter that the breakdown of the claim be more specifically itemized. This would have been the efficient way to proceed. Instead, RBC’s counsel waited until the day of the hearing and caught the Applicant by surprise and caused an unnecessary delay in the process.

Succinctly, RBC’s counsel had ample advance knowledge that the ANLI Assessment was being claimed, and could have easily dealt with the alleged preliminary issue in a more timely and cost-efficient manner.

It should be noted, that during the course of RBC’s counsel’s lengthy arguments for why there should be a preliminary issue hearing, I pointed out, possibly more than once, that the burden of proof rested with Mr. Sellathamby and that RBC’s counsel’s unnecessary prolongation of the hearing in insisting on a preliminary issue on a matter which should be dealt with during the hearing would result in cost consequences to RBC. This warning was ignored by RBC’s counsel who continued to argue for the preliminary issue hearing.

After I made my ruling not to proceed on the preliminary issue, it was late in the afternoon and it was decided that the hearing would be adjourned for approximately six weeks to March 28 and 29, 2007.

At the start of the hearing on March 28, 2007, after hearing submissions from both parties, I reversed my decision made at the hearing on February 19, 2007, to exclude the documents and report produced by Mr. Sellathamby³ and allowed this evidence to be included in the proceeding.

After I reversed my ruling and included the Applicant’s evidence, RBC’s counsel, who had so vigorously opposed the inclusion of these documents, then, for the most part, relied on these documents for his cross-examination of the two witnesses, while ignoring RBC’s own relevant documentary evidence.

In RBC’s documentary evidence, produced at the arbitration hearing as Exhibit 5, were the clinical notes and records of Mr. Sellathamby’s family doctor provided by Mr. Sellathamby. During his lengthy and repetitive cross-examination of Mr. Sellathamby, RBC’s counsel made no reference to relevant and material evidence in these clinical notes which clearly in the end was the main reason Mr. Sellathamby’s claim was defeated.⁴

Succinctly, it was not the evidence that RBC’s counsel so vigorously wanted to exclude and yet relied on for his cross-examination that defeated Mr. Sellathamby’s claim, but it was the RBC’s own documentary evidence that RBC’s counsel chose to ignore.

I do not know what RBC’s counsel’s strategy was to ignore relevant and material evidence that eventually defeated Mr. Sellathamby’s claim and pursue a cross-examination which proved to be of little value. The end result, however, was an unnecessary prolongation to the hearing.

In addition, during the arbitration hearing, RBC’s counsel made numerous unwarranted objections. For example, RBC’s counsel objected very vigorously to Dr. Patel as a witness because RBC was not given proper notice. In fact, the evidence showed that RBC had in fact been given proper notice.

RBC’s counsel objected quite forcefully and at great length to a written outline of the oral submissions presented to me by Mr. Sellathamby’s representative in closing submissions. RBC’s counsel appeared not to know or understand that, often in closing submissions, counsel may provide a written outline or copy of their oral submissions.

In addition, during examination-in-chief and in reply, RBC’s counsel made numerous and irrelevant objections which were not upheld. In his cross-examination of Mr. Sellathamby and Dr. Patel, RBC’s counsel unnecessarily prolonged the proceedings by continually repeating questions that the witnesses had answered. Although this repetition was pointed out to him as wasting time, he persisted in continuing to do so.

In summary, although RBC was successful in this arbitration, success is not the sole criteria in determining whether a party will be awarded their expenses. I find that a hearing on a straightforward issue, with a small dollar value and no novel or significant legal or complex factual elements, that should have lasted no more than a day, was unnecessarily spun out to three days by the actions of RBC’s counsel. As Arbitrator Bayefsky stated in Villers and Pilot Insurance Company:⁵ “[A]n award of expenses must reflect not only the final result of a proceeding, but the general nature of the proceeding and the parties’ interaction prior to the hearing, as contemplated by the criteria set out in the Expense Regulation.”

Accordingly, for these reasons, I find that RBC obstructed and unnecessarily prolonged the hearing. Accordingly, I find RBC is not entitled to its expenses in this arbitration.

In certain circumstances an applicant who has not been successful in arbitration can be awarded their expenses in whole or in part where it is balanced out by the other criteria in the Expense Regulation that an arbitrator must consider.⁶ Although I have found that RBC unnecessarily obstructed and prolonged the arbitration hearing and is not entitled to its expenses, I also find that neither is Mr. Sellathamby entitled to his expenses.

There is no dispute that Mr. Sellathamby was involved in a car accident and sought treatment for alleged injuries at Downsview. What was in dispute in this arbitration was whether his claim for medical benefits was reasonable and necessary.

Had this case been solely a matter of weighing and balancing the medical evidence to come to my conclusion that the claim was not reasonable and necessary, I would have awarded Mr. Sellathamby his expenses for two days of the hearing that were unnecessarily prolonged by the actions of RBC’s counsel. However, in coming to my conclusion that Mr. Sellathamby’s claim was not reasonable and necessary, I relied mainly on the fact that Mr. Sellathamby was not a credible witness. Specifically, I did not find from Mr. Sellathamby’s evidence that he was seriously injured in the car accident to be plausible or credible on the facts of this case. Accordingly, I found that his claim for medical benefits was not reasonable or necessary.

As noted above, I relied on Mr. Sellathamby’s family doctor’s clinical notes and records to show that he was not a credible witness. Having provided these clinical notes and records, Mr. Sellathamby made no effort to explain the significant contradictions between his oral testimony and the clinical notes of his family doctor. For these reasons, despite the fact that RBC’s counsel unnecessarily obstructed and prolonged the arbitration hearing, and that Mr. Sellathamby’s representative did his best to conduct his case in a very efficient and reasonable manner, I do not believe that Mr. Sellathamby is entitled to any expenses.

Accordingly, for these reasons, I find that neither party is entitled to their expenses.

May 13, 2008

Joyce Miller Arbitrator

Date

Financial Services Commission of Ontario