Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2011 ONFSCDRS 11
Appeal P09-00029
OFFICE OF THE DIRECTOR OF ARBITRATIONS
COACHMAN INSURANCE COMPANY Appellant
and
ALEX D'ETTORRE Respondent
BEFORE: David Evans
REPRESENTATIVES: H. Jason Hickman for Coachman Insurance Company Chantal Brochu for Mr. D'Ettorre
HEARING DATE: January 6, 2011, by teleconference
APPEAL EXPENSES ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The Nordic Insurance Company of Canada shall pay Coachman Insurance Company its legal fees and disbursements of this appeal, fixed in the amount of $4,700.
January 24, 2011
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
In a decision dated July 28, 2010, I allowed the appeal by Coachman Insurance Company (Coachman) of the arbitral decision dated July 7, 2009. Coachman now seeks its legal fees and disbursements of the appeal.
II. BACKGROUND
Mr. D’Ettorre was injured in a collision between two motor vehicles on November 7, 2001 and claimed income replacement benefits under the SABS–19961 from Coachman, his insurer. Mr. D’Ettorre also commenced a tort action against the other driver, an insured of The Nordic Insurance Company of Canada (The Nordic).
Mr. D’Ettorre settled the tort action with The Nordic and assigned to it his future collateral benefits claims against Coachman. Subsection 65(1) of the SABS provides that the assignment of the right to pursue an arbitration proceeding, such as here, is void but subject to s. 267.8(12) of the Insurance Act. This in turn provides that future collateral benefits can be assigned to tort defendants by “[t]he court that heard and determined the action … after the trial of the action.” The Nordic obtained a consent order for the assignment. The Arbitrator held that s. 267.8(12) applied, so The Nordic could continue with the arbitration in Mr. D’Ettorre’s name.
On appeal, I determined that a consent order is not the same as a court determination after the trial of an action, so the exception did not apply. However, while The Nordic could not continue the proceeding in Mr. D’Ettorre’s name, I also found that Mr. D’Ettorre retained the right to obtain further recovery from Coachman on his own behalf.
III. ANALYSIS
Pursuant to s. 282(11) of the Insurance Act, an 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.” Subsection 283(7) of the Act provides that ss. 282(10) to (11.2) apply with necessary modifications to appeals. Subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended, in turn provides that an arbitrator or delegate shall consider only the criteria set out therein for “the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding.”
The parties agree that the relevant criteria of s. 12(2) are paragraph 1, “Each party’s degree of success in the outcome of the proceeding,” and paragraph 3, “Whether novel issues are raised in the proceeding.”
The parties disagree on Coachman’s “degree of success.” The Nordic submits that Coachman did not achieve all it asked for in its Notice of Appeal. The actions it sought in the appeal were both a quashing of the order dated July 7, 2009, as well as an order entirely dismissing the arbitration proceeding. Coachman was not successful on that latter point. However, the request to dismiss the proceeding played little role in the appeal. Instead, the argument focused on the validity of the assignment. The Nordic was unsuccessful and Coachman was successful on this point.
The parties agree that the matter was novel. In that regard, after the arbitrator made his order, the decision in Stokes v. Desjardins groupe d’assurances générales, 2009 CanLII 45320, [2009] O.J. No. 3608 (ON S.C.) was issued. This decision played an important role in the appeal. There was also no appeal case on point, so one of the grounds Coachman raised for acknowledging an appeal from a preliminary issue was to seek appellate-level guidance to clarify the law governing the assignment of statutory accident benefits. In turn, The Nordic advised me that it will be seeking further guidance on the issue by pursuing judicial review of my decision.
Novelty favours Coachman, as it took the risk of taking this novel point to appeal. If it had lost, I would have been inclined to let each party bear its own expenses. Since it won, I find that Coachman is entitled to its legal expenses of the appeal.
Little was in dispute between the parties about the quantum of Coachman’s expenses. Regarding legal fees, by my calculation Coachman is claiming $4,580 inclusive of GST for the appeal. The Nordic submits that the time allotted for the appeal hearing should be reduced because the hearing did not take 2.8 hours. It submits that the preparation of the Bill of Costs should be reduced because the Bill includes additional arbitration expenses, whereas the only issue is appeal expenses. I agree. I allow 2 hours for the appeal hearing, and reduce the time for the preparation of the Bill by half. Accordingly, I award $4,425 in legal fees inclusive of GST (the GST was in effect at the time the services were provided) for the appeal hearing.
As for disbursements, Coachman’s calculation includes arbitration disbursements. However, I accept Coachman’s submission that there were more disbursements for the appeal than for arbitration and allow two thirds of the amount claimed, namely $275.
Accordingly, I find that Coachman is entitled to $4,700 in legal fees and disbursements for the appeal hearing.
January 24, 2011
David Evans Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.