Kaneshan v. Coachman Insurance Company, 2010 ONFSCDRS 51

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 51

FSCO A07-002011

BETWEEN:

KANNAN KANESHAN

Applicant

and

COACHMAN INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Robert A. Kominar

Heard: February 6, 2009, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions received by September 16, 2009.

Appearances: Alon Rooz and Arvin Gupta for Mr. Kaneshan Andrew Davidson for Coachman Insurance Company

Issues:

The Applicant, Kannan Kaneshan, was injured in a motor vehicle accident on March 7, 2006. In a decision dated July 30, 2008, 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. Kaneshan’s claims for accident benefits are dismissed.

The issue in this further hearing is:

Are either Coachman or Mr. Kaneshan entitled to their expenses incurred in respect of this arbitration hearing?

Result:

Mr. Kaneshan is not entitled to expenses. Coachman is entitled to its expenses fixed in the amount of $8,532.81.

EVIDENCE AND ANALYSIS:

After delivering my decision on the substantive issues in dispute in this arbitration, I encouraged the parties to attempt to resolve the issues of entitlement to and quantum of expenses. My understanding is that they did discuss the possibility of settlement of this final issue but were unsuccessful in reaching any agreement. As a result Coachman requested that I determine the expense issues.

Arbitrators, pursuant to the Expense Regulation, are required to address the following criteria in exercising their discretion regarding legal costs: degree of success; any written offers to settle; existence of novel issues; conduct of any party that prolonged, obstructed or hindered the proceedings; any aspect of the proceeding was improper, vexatious or unnecessary; and failure to attend at any required examination under section 42 of the Schedule.

Having carefully considered the parties’ submissions on the above matters I find that Coachman is entitled to its expenses in this arbitration. Mr. Kaneshan, as my reasons for decision make clear, was completely unsuccessful in his claims against Coachman. In fact, my findings were that his evidence was at times completely unfounded and frankly unbelievable. Mr. Kaneshan’s counsel argued that there were offers to settle made before the hearing commenced that reflected a position that came close to the final outcome of the case. Coachman’s position was that the correspondence alluded to here did not constitute formal offers to settle, in that it did not identify clearly what claims were being released in return for the funds requested. I agree with Coachman that the correspondence which has been described by the Applicant as an Offer to Settle is not specific enough for Coachman to have meaningfully responded to it. Notwithstanding that, the request in that correspondence was for Coachman to pay some monies to Mr. Kaneshan and also to pay his legal costs. I find that in the circumstances it was reasonable for Coachman to resist accepting such an offer and to proceed to a hearing on the merits.

There were no novel issues in this arbitration. In fact, it dealt with the factual basis for common claims for benefits and no complex legal issues were raised. Given the normal length of contested FSCO arbitrations I find that neither party acted in a way to delay, hinder or obstruct the proceedings. I also find that there were no allegations that Mr. Kaneshan failed to attend at required examinations.

This leaves the criterion of whether the proceedings were improper or vexatious. Coachman argued that the complete failure of Mr. Kaneshan to persuade me of the factual merits of his claim, de facto, amounts to an improper proceeding. I respectfully disagree. Parties have the right to have their claims heard by this tribunal, just as they do in the courts. Simply because one is unsuccessful in persuading an adjudicator to accept his version of the facts, does not constitute abuse of the arbitration process. The sanction the law offers for unsupported claims is an award of expenses. I find that although Mr. Kaneshan was unable to meet the burden of proof for any claim he made, he did not cross the threshold of pressing an improper or vexatious hearing.

In summary, I find on the balance of probabilities that Coachman is entitled to an award of expenses in this arbitration.

Mr. Davidson submitted a Bill of Costs requesting fees in the amount of $7,686.94 and disbursements of $906.37. The fees are based on 26 hours of attendance at the arbitration proceeding and preparation of 65 hours. I find that to be an acceptable ratio of preparation to hearing time. I therefore grant Coachman legal fees in the amount of $7,686.94. The disbursements requested are all normal, other than that I decline to award Coachman $60.50 for “investigation” as I am unclear what that item refers to. Therefore, Coachman is entitled to expenses in the amount of $8,532.81 inclusive of GST.

There is one other significant issue that I wish to comment on.

Much of the argument and time consumed in the expense hearing stage of this proceeding dealt with a request by Coachman to have Mr. Kaneshan’s solicitors pay some or all of the legal expenses awarded. Mr. Davidson took the position that it is reasonable to infer that legal counsel somehow were implicated in encouraging their client to pursue a completely unsupportable claim for accident benefits. Based on the fact that I found Mr. Kaneshan’s evidence to be almost completely unbelievable, Mr. Davidson argued that I should also find that his lawyers were either incompetent in advising him about the matter or provoked him to proceed notwithstanding that he had no rationally supportable case to make. In either event, Mr. Davidson requested that the law firm of Mazin Rooz Mazin be held at least partially liable for the payment of expenses.

I was concerned about the nature of the continuing retainer of the law firm Mazin Rooz Mazin after the hearing. At the first scheduled expense hearing, Mr. Kaneshan participated personally and requested time to make submissions on who should pay expenses. At that time, he was unclear as to whether he was still working with the law firm or not. The expense hearing was adjourned to allow him to determine who would represent him or whether he would represent himself. After that, however, Mr. Kaneshan did not further actively participate in the process and either Mr. Gupta or Mr. Rooz appeared and made submissions on his behalf as his counsel.

Mr. Davidson raised the issue of whether there still was any retainer between Mr. Kaneshan and the law firm. Mr. Davidson also alleged that there was a conflict of interest between the Applicant and the law firm at the time of the expense hearing and that I should preclude Mr. Rooz from representing Mr. Kaneshan further in this arbitration.

I have reflected on this matter at some length. I do find that the nature of the relationship between Mr. Kaneshan and the Mazin Rooz Mazin law firm during the time of the expense hearing is confusing and at some level questionable. I was not offered any explanation for the change in view of Mr. Kaneshan about whether he wanted legal representation or not. However, after hearing Mr. Rooz’s submissions, including his offer to give evidence about the nature of his retainer with Mr. Kaneshan if I ordered him to do so, I have determined that I am prepared to accept Mr. Rooz’s word as a lawyer that he is in fact still retained in this matter and that he does not believe himself to be in a conflict of interest. Again, I note that after the initial expense hearing date Mr. Kaneshan did not participate further or make any other submissions on expenses other than through Mr. Rooz and Mr. Gupta. I have heard nothing since that would lead me to conclude that Mr. Kaneshan is not continuing to retain the law firm.

Mr. Davidson argued that there was something unseemly about the relationship between client and lawyer here and that it might in fact amount to an improper professional relationship. Whether or not that is the case, I find that it is not my responsibility to delve into the details of Mr. Kaneshan’s retainer agreement with the Mazin Rooz Mazin firm. Specifically, I decline to make any decision on whether Mr. Rooz or his firm had a contingency fee arrangement with Mr. Kaneshan, or if that was the case, that Mr. Rooz was precluded from requesting any more in costs than he recovered for his client, which in this case was zero. I find that to be a moot point, given my decision that Mr. Kaneshan is not entitled to expenses.

Therefore, notwithstanding my concerns about the nature of the solicitor-client relationship here, I find that Mr. Kaneshan should be completely liable for payment of Coachman’s expenses and I decline to order that either Mr. Rooz or Mr. Gupta be held personally responsible for paying any portion of these fees. If Mr. Kaneshan is concerned about the result, then he will have to take that up with his lawyers outside of the arbitration process.

April 23, 2010

Robert A. Kominar Arbitrator

Date