Fathalla Elmutiagin v. Kingsway General Insurance Company, 2010 ONFSCDRS 46

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 46

FSCO A08-000227

BETWEEN:

FATHALLA ELMUTIAGIN

Applicant

and

KINGSWAY GENERAL INSURANCE COMPANY

(now Jevco Insurance Company)

Insurer

DECISION ON EXPENSES

Before: Lloyd Richards

Heard: By telephone conference call on January 29, 2010

Appearances: No one appearing for Mr. Elmutiagin

Rohit Sethi for Jevco Insurance Company

Issues:

The Applicant, Fathalla Elmutiagin, was injured in a motor vehicle accident on October 18, 2004. In a decision dated June 25, 2009, I dealt with his claims for statutory accident benefits under the Schedule.¹ I made the following order, while reserving on the issue of expenses:

Mr. Elmutiagin’s arbitration is dismissed as frivolous and vexatious, pursuant to Rule 68 of the Dispute Resolution Practice Code.

The issue in this further hearing is:

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

Result:

Jevco is entitled to its expenses in the amount of $1,144.63.

EVIDENCE AND ANALYSIS:

Kingsway General Insurance Company (now Jevco Insurance Company — “Jevco”) requested the expense hearing in this case. Mr. Elmutiagin was advised of the teleconference expense hearing by notice mailed to his last counsel’s address as Mr. Elmutiagin had left Canada to reside in the U.S.A. without leaving a forwarding address. Jevco requests that I grant it the expenses it incurred in this case so as to promote a respect for this tribunal and its processes and to discourage further abuses. Jevco also seeks to have Mr. Elmutiagin pay the $3000.00 arbitration filing fee.

The Law:

Subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8 (as amended), 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 by the regulations, to the maximum set out in the regulations.

Regulation 664, R.R.O. 1990, made under the Insurance Act, as amended to O. Reg. 275/03

reads as follows:

12(1) The expenses set out in the Schedule are prescribed for the purpose of subsection 282(11) of the Act.

(2) An arbitrator shall, under subsection 282(11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

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 refused or failed to submit to an examination as required under section 42 of the Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of the Schedule.

(3) Upon the request of the insurer or the insured person, the arbitrator shall, for the purposes of awarding expenses, take into account all written offers to settle, if any,

(a) that were made after the conclusion of mediation and before the conclusion of the arbitration; and

(b) that were made in accordance with the rules of practice and procedure applicable to the proceeding.

(4) If the arbitrator is requested to take into account a written offer under subsection (3), the arbitrator shall have regard to the terms of the offer, the timing of the offer, the response to the offer and the result of the proceeding.

Background:

Mr. Elmutiagin filed an Application for Arbitration with the Financial Services Commission of Ontario dated January 30, 2008. He did not attend the initial pre-hearing on June 3, 2008, nor the resumed pre-hearing scheduled for July 16, 2008. Mr. Elmutiagin again failed to appear at a further resumed pre-hearing scheduled for August 22, 2008. His counsel at the time indicated that despite his best efforts he was not able to contact Mr. Elmutiagin to get instructions. I permitted Mr. Elmutiagin’s counsel to withdraw from the proceedings by Order dated October 3, 2008. I dismissed Mr. Elmutiagin’s Application for Arbitration by Order dated June 25, 2009 because I found that the Application was frivolous and vexatious as Mr. Elmutiagin had failed to participate meaningfully during the proceedings and had not met his obligation to maintain contact with his counsel and to provide instructions.

Entitlement to Expenses:

Jevco was entirely successful in this case as Mr. Elmutiagin participated no further than submitting his Application for Arbitration. Neither party made offers to settle in this case, nor were any novel issues raised.

I find that Mr. Elmutiagin’s conduct unnecessarily prolonged the proceedings in this case. Mr. Elmutiagin maintained infrequent contact with his counsel until he stopped communicating altogether. Even though he was notified, he failed, without adequate excuse, to attend at all the proceedings scheduled in this case. As I stated in my previous Order I find that Mr. Elmutiagin’s conduct rendered the proceedings frivolous and vexatious. There are no issues in this case concerning Mr. Elmutiagin’s failure to attend at an examination.

Quantum:

Counsel for Jevco provided me with a detailed Bill of Costs. Three separate counsel and what I believe are two clerks or two law students, worked on this file at Jevco. Ms. Marla Emdin, counsel, appeared three times at pre-hearings on Jevco’s behalf. Ms. Shelley Khan, counsel, appeared once at a pre-hearing on Jevco’s behalf. The total time that Jevco claims it spent on this case is 26.9 hours. The hourly rate claimed for counsel is $77.56 and $23.00 for the clerks or law students, which according to the legal aid tariff, are the appropriate rates. I have reduced the Bill of Costs to more accurately reflect FSCO norms for preparation and appearances. Ms. Marla Emdin’s total hours have been reduced from 20.3 to 8.5. Ms. Shelley Khan’s hours, which reflect her one appearance at a resumed pre-hearing, have been reduced from 1.7 to 1.2. Ms. Tracy Hobson’s hours have been reduced from 2.5 to 1.5. Using the revised hours at the standard legal aid rates leads to a total Bill of Costs of $1,144.63. I find this to be reasonable, given the review of the file, research and preparation for appearances, and actual appearances at the Commission in this matter.

Jevco also requested that Mr. Elmutiagin pay the $3000.00 arbitration filing fee. Jevco believes that such an order would act to deter further abuses of the Commission’s processes. Jevco provided no Commission or Court decisions supporting its position. I have no jurisdiction to make such an award and so will not consider Jevco’s request.

CONCLUSION:

Pursuant to subsection 282(11) of the Insurance Act, I find that Jevco is entitled to its expenses in the amount of $1,144.63.

April 14, 2010

Lloyd (J.R.) Richards

Arbitrator

Date