Financial Services Commission of Ontario
Neutral Citation: 2009 ONFSCDRS 27
FSCO A06-001473
BETWEEN:
SUDHIR BHOLA Applicant
and
PERSONAL INSURANCE COMPANY OF CANADA Insurer
REASONS FOR DECISION ON EXPENSES
Before: Arbitrator Denise Ashby
Heard: By telephone conference call on January 9, 2009.
Appearances: David S. Wilson for Mr. Bhola Peter Yoo for Personal Insurance Company of Canada
Issues:
The Applicant, Sudhir Bhola, was injured in a motor vehicle accident on January 10, 2004. He applied for and received statutory accident benefits from Personal Insurance Company of Canada (“Personal”), payable under the Schedule.1 Mr. Bhola disputed Personal’s termination of benefits and denial of others. The parties were unable to resolve their disputes through mediation, and Mr. Bhola applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issues in this hearing are:
What is the amount of Mr. Bhola’s expenses of the arbitration pursuant to subsection 282(11) of the Schedule?
Is Personal liable to pay Mr. Bhola’s expenses in respect of the expense hearing pursuant to subsection 282(11) of the Schedule? In the event Personal is liable to pay Mr. Bhola’s expenses, what is the amount of his expenses?
Is Mr. Bhola liable to pay Personal’s expenses in respect of the expense hearing pursuant to subsection 282(11) of the Schedule? In the event Mr. Bhola is liable to pay Personal’s expenses, what is the amount of its expenses?
Result:
Personal shall pay Mr. Bhola’s expenses of the arbitration of $35,430.30, inclusive of G.S.T.
Mr. Bhola is not liable to pay Personal’s expenses in respect of the expense hearing.
Personal shall pay Mr. Bhola’s expenses of the expense hearing of $150.00 plus G.S.T.
On November 4, 2006, a pre-hearing was held. The hearing was scheduled for four days commencing on July 30, 2007.
On August 1 and 2, 2007, a preliminary issue hearing was held. The Arbitrator released his decision on September 17, 2007. He found that the long term disability benefits paid to Mr. Bhola were deductible from his income replacement benefits and that Mr. Bhola was to be treated as self-employed.
On November 7, 2007, the pre-hearing was resumed. The hearing was rescheduled for five days commencing May 20, 2008.
On May 20, 2008, the parties advised the Commission that they had reached a settlement of all issues in dispute except for expenses. The Hearing Arbitrator wrote to the parties and advised if they were unable to resolve the issue of expenses an expense hearing could be scheduled before him pursuant to Rules 75 to 79 of the Dispute Resolution Practice Code (DRPC).
On July 2, 2008, counsel for Mr. Bhola wrote to the Commission advising that Personal had agreed Mr. Bhola was entitled to his expenses. However, the parties had not settled the quantum of his expenses. He enclosed his Bill of Costs.
On July 9, 2008, the Hearing Arbitrator wrote to the parties and advised that the Commission would close its file if it had not heard from them by September 15, 2008.
On August 5, 2008, Counsel for Mr. Bhola wrote to the Commission seeking a date for an expense hearing.
On October 22, 2008, the Commission issued a Notice of Assessment of Expenses for January 9, 2009.
On January 6, 2009, Mr. Bhola filed another Bill of Costs and the Partial Full and Final Release (Release) executed by the parties.2 As well, Personal filed its written submissions and Bill of Costs3 in respect of the Preliminary Issue Hearing.
EVIDENCE AND ANALYSIS:
Mr. Bhola submits that the expenses set out in his Bill of Costs are reasonable in the context of the complexity and nature of the arbitration proceedings.
Mr. Bhola objected to Personal’s submission that its expenses, in respect of the Preliminary Issue Hearing, should be deducted from any expenses awarded to him. Mr. Bhola submitted that this amounted to resiling from the agreement which the parties had entered into. Mr. Bhola referred to the wording of the Release which provided:
IN CONSIDERATION of all sums paid to date by the Insurer to the Applicant and the further payment of …, plus the insured’s expenses relating to the arbitration proceeding, subject to assessment if necessary, paid by the Insurer to the Applicant, …4
Mr. Bhola noted that Personal’s Bill of Costs reflects 64 hours for preparation and attendance at the Preliminary Issue Hearing. Therefore, the 21.8 hours claimed by him cannot be viewed as unreasonable.
Mr. Bhola relies on the expense decision in Hutchinson and Security National5. In this decision the Arbitrator determined that it was reasonable to docket .2 hours in respect of correspondence. He reviewed other cases which had found similarly.
Personal agrees that Mr. Bhola is entitled to his expenses of the arbitration. It submits that as Personal was successful at the Preliminary Issue Hearing Mr. Bhola’s expenses, of that proceeding, should be disallowed and Personal’s expenses deducted from Mr. Bhola’s assessed expenses. Further, 15% of Mr. Bhola’s disbursements should be attributed to the Preliminary Issue Hearing and deducted from his assessed expenses.
Personal disputed the reasonableness of 24.4 hours in respect of 122 letters sent and received and docketed at .2 hours per letter.
I find that the Release is unambiguous. Personal agreed to pay Mr. Bhola’s reasonable expenses of the arbitration proceedings. If the parties could not agree on the amount then expenses would be assessed. Therefore, I must determine whether the expenses set out in Mr. Bhola’s Bill of Costs, are reasonable and fall within Section F of the Expense Regulation. It is not for me to go behind the clear wording of the release to exclude the costs of certain of those proceedings and deduct the expenses incurred by the Personal.
Arbitrators at the Commission have avoided a line by line assessment of expenses. As in Hutchinson I do not find that .2 hours per letter is unreasonable. I accept that 122 letters were sent and received during these proceedings. Therefore, I award the amounts claimed by Mr. Bhola for correspondence.
This matter settled on the first day of a five day hearing. All preparation would have been concluded by the time the matter settled. I find that the time attributed to preparation and attendance at the various proceedings is within the range of arbitral precedent. Therefore, I find that the fees charged are reasonable and allow them in full together with GST.
I find the disbursements set out in the Bill of Costs are reasonable and consistent with the provisions of Section F of the Expense Regulation. Therefore, I allow those costs as well.
On the basis of the foregoing I award Mr. Bhola his expenses in the amount of $35,430.00 inclusive of G.S.T.
EXPENSES:
I was troubled by Personal’s submissions in respect of the expenses of the Preliminary Issue Hearing. It signed a release agreeing that Mr. Bhola was entitled to his expenses. It then put Mr. Bhola’s entitlement to his expenses of the Preliminary Issue Hearing in issue and sought credit for its own expenses in the assessment hearing before me. This was inappropriate. As a consequence, I award Mr. Bhola his expenses of the expense hearing in the amount of $150.00 plus G.S.T., representing 1 hour of counsel’s time for preparation and attendance.
February 24, 2009
Denise Ashby Arbitrator
Financial Services Commission of Ontario
Neutral Citation: 2009 ONFSCDRS 27
FSCO A06-001473
BETWEEN:
SUDHIR BHOLA Applicant
and
PERSONAL INSURANCE COMPANY OF CANADA Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The Personal Insurance Company of Canada shall pay to Mr. Bhola $35,430.00, inclusive of G.S.T., in respect of his expenses of these arbitration proceedings.
The Personal Insurance Company of Canada shall pay to Mr. Bhola $150.00, plus G.S.T., in respect of his expenses of this expense hearing.
February 24, 2009
Denise Ashby Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Exhibits 1 and 2
- Exhibit 3
- Exhibit 2
- (FSCO A03-001712 and A05-000327, November 26, 2007)