Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2010 ONFSCDRS 16

Appeal P08-00034

FARHAT ABBAS Appellant

and

SECURITY NATIONAL INSURANCE CO./ MONNEX INSURANCE MGMT. INC. Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Alon Rooz for Mr. Farhat Abbas Mr. Alexander Lempp for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

HEARING DATE: By written submissions received by February 1, 2010

APPEAL EXPENSES ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Mr. Farhat Abbas shall pay Security National Insurance Co./Monnex Insurance Mgmt. Inc. part of its legal expenses of this appeal, fixed in the amount of $1,500.00, inclusive of GST.

February 5, 2010

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND

The Appellant, Mr. Farhat Abbas, was injured in an October 15, 2005 motor vehicle accident. By order dated October 1, 2008, Arbitrator Lee (“the Arbitrator”) dismissed the Appellant’s claims for statutory accident benefits claimed under the Schedule and awarded the Respondent, Security National Insurance Co./Monnex Insurance Mgmt. Inc., its reasonable legal arbitration expenses.

The Arbitrator’s subsequent December 23, 2009 decision held that the Appellant’s counsel was not personally liable for any legal expenses awarded against the Appellant.

My November 10, 2009 decision confirmed the Arbitrator’s October 1, 2008 decision. If the parties were unable to agree on the legal expenses of this appeal, they were directed to Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003).

My earlier February 18, 2009 order held, in part, that (a) the grounds for appeal set out in the Appellant’s October 28, 2008 Notice of Appeal and December 19, 2008 written submissions could proceed to appeal, and that (b) the Appellant could not file his counsel’s affidavit sworn December 19, 2008 as fresh evidence in this appeal. The legal expenses of this interim decision were deferred to the final determination of the appeal.

The parties were unable to agree on the legal expenses of this appeal. My December 14, 2009 letter set out time lines for the exchange of written submissions and documentation regarding entitlement to and the quantum of legal expenses. I asked both parties to address whether an oral hearing was reasonably and fairly warranted regarding these expense issues.

The Appellant submits that he is entitled to his legal costs of this appeal of $3,657.80 for 22.6 hours at $150 an hour for legal counsel and $23 an hour for two hours for a law clerk. At the legal aid rate, $2,148.31 is sought. The Appellant submits that he was successful regarding the Respondent’s preliminary issue that this appeal be restricted to the grounds set out in the Appellant’s Notice of Appeal. The Appellant also submits that no evidence was available as to the expenses payable during an allowable period of treatment as a result of an error in law at arbitration in determining entitlement to certain medical benefits and failure to correctly analyze the facts.

The Appellant further submits that novel issues were raised in this appeal regarding the interplay of the provisions of the Schedule. Further, the Respondent’s objection to the scope of the Appellant’s written submissions prolonged, obstructed or hindered this proceeding.

The Respondent seeks $8,569.58 in legal expenses from the Appellant. It does not seek its legal expenses of this appeal against counsel. The Respondent’s Bill of Costs lists 112.3 hours at the applicable legal aid rate. The Respondent submits that it is entitled to its legal expenses on the basis that it was successful in this appeal.

Both parties agree that these expense issues be determined on the basis of the written submissions only.

II. ANALYSIS

My February 18, 2009 preliminary issues decision was determined on the basis of written submissions. My November 10, 2009 decision was rendered after a one-day, 5.5 hour hearing on September 23, 2009 and further submissions received by October 27, 2009. I would only allow 5.5 hours for attendance at the appeal hearing, not the 8.8 hours claimed by the Respondent or the 7.0 hours claimed by the Appellant.

The Respondent claims a total of 103.5 hours in hearing preparation, but its actual hours, when added, equal 96.5. The Appellant submits 14.2 hours for hearing preparation. I find the hours the Respondent claims for preparation unreasonably high and disproportionate to the issues in dispute in this appeal.

My February 18, 2009 decision stated that I was not persuaded that the Appellant’s fresh affidavit evidence, if believed, could reasonably be expected to have affected the result or that it could not have been adduced at arbitration with due diligence. On the other hand, I found that the Appellant’s grounds for appeal expanded upon in its written submissions flowed, to a significant extent, naturally and consequentially from the undertaking issue that was raised in the Notice of Appeal. I found that the prejudice, if any, to the Respondent in allowing the Appellant’s expanded written submissions to be essentially tactical.

The Expense Regulation in R.R.O. 1990 Regulation 664, made under the Insurance Act, sets out the criteria for awarding legal expenses. I find that the most relevant criterion regarding the February 18, 2009 preliminary issue decision is the divided result. I am persuaded that both parties should bear their respective legal expenses regarding this decision.

The Respondent was successful in the outcome at the main hearing. However, I find that with part of the appeal, there were novel and important issues of law addressed regarding intricate and complicated provisions of the Schedule. On the other hand, parts of the appeal had little merit. As an example, the Appellant appealed the Arbitrator’s dismissal of his housekeeping claim notwithstanding, as noted in my decision, the Arbitrator’s statement that the housekeeping claim was not addressed during the evidentiary portion of the hearing.

Further, the inability to determine payable expenses during a period of entitlement, as stated in my decision, arose from the Appellant’s failure to provide reliable supporting evidence.

Balancing the relevant criteria under the Expense Regulation, using the applicable hourly legal aid rate of $87.26 and significantly reducing the disproportionate hours sought by the Respondent, I find that the Respondent is entitled to part of its legal expenses, fixed at $1,500.00, inclusive of GST.