Neutral Citation: 2011 ONFSCDRS 49

FSCO A05-002849

BETWEEN:

LEON FRANCIS ROCHELEAU

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before: Arbitrator Denise Ashby

Heard: Written submissions concluded on March 11, 2011

Appearances: Karl Arvai for Mr. Rocheleau Ian D. Kirby for Allstate Insurance Company of Canada

Issues:

The Applicant, Leon Francis Rocheleau, was injured in a motor vehicle accident on September 8, 2000. In a decision dated May 23, 2008, I dealt with his claims for statutory accident benefits pursuant to the Schedule.¹

I ordered that Allstate pay Mr. Rocheleau a weekly income replacement benefit at the rate of $400.00 pursuant to subsection 5(2)(b) of the Schedule, a special award fixed at $25,000.00 and interest on all overdue payment of benefits. I reserved on the issue of expenses stating:

The parties made no submissions with respect to expenses. I encourage them to resolve the issue, failing which they may request an expense hearing before me in accordance with the Dispute Resolution Practice Code.

The issue in this further hearing is:

Did Allstate fail to calculate the interest payable to Mr. Rocheleau in a manner consistent with the Decision and Order dated May 23, 2008?
Is Allstate liable to pay Leon Rocheleau’s expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act and, if Allstate is liable for his expenses, what is the quantum of his expenses?

Result:

I decline to make a finding with respect to the interest calculation.
Mr. Rocheleau is not entitled to his expenses.

EVIDENCE:

My decision was released on May 23, 2008. Mr. Rocheleau requested an Expense Hearing in January 2011. The Expense Hearing was conducted as a written hearing and submissions concluded on March 11, 2011.

Neither Mr. Rocheleau nor Allstate formally sought to have documents entered as Exhibits. This is not unusual in an Expense Hearing. However, their written submissions included documents which were relied upon by the parties and were considered by me in making my decision. Therefore for administrative clarity I have deemed the following documents as Exhibits:

Mr. Rocheleau’s Bill of Expenses for Fees and Disbursements and the appended Statement of Experience and Time Summary, 9 pages, Exhibit 1;
Mr. Rocheleau’s Offer to Settle dated December 7, 2007, Exhibit 2;
Allstate’s Offer to Settle dated December 6, 2007, Exhibit 3;
E-mail dated July 14, 2008, updated interest calculations of Karen Dalton, CA, and the attached calculations of net IRBs payable and interest calculation printout, adjusted IRB at age 65 and Mortality Adjusted Present Value of IRBs, 9 pages, Exhibit 4;
Allstate’s letter dated June 26, 2008, Exhibit 5;
Allstate’s letter dated December 23, 2008, Exhibit 6;
Letter dated June 19, 2008, from William C. Stuart, C.A., and the attached 3 Schedules, 10 pages, Exhibit 7;
Mr. Rocheleau’s letter dated October 25, 2010, Exhibit 8;
Mr. Rocheleau’s letter dated December 9, 2010, Exhibit 9; and
Mr. Rocheleau’s e-mail dated January 13, 2011 respecting the dates for the Expense Hearing, Exhibit 10.

ANALYSIS:

Interest Calculation:

Mr. Rocheleau submitted that Allstate failed to calculate interest in accordance with my Decision of May 23, 2008. He sought to have me deal with the alleged error as part of the Expense Hearing. Allstate relied on the doctrine of laches on the basis that the further interest calculations of Mr. Rocheleau’s accountant were received in July 2008 and the time to raise the issue of the calculation was in 2008.

I find that I have no authority to deal with this issue within an Expense Hearing and therefore I decline to deal with it.

Entitlement to Expenses:

On February 3, 2011, Mr. Rocheleau submitted a Bill of Expenses in the amount of $30,199.70 inclusive of fees, disbursements and GST.² Following receipt of Allstate’s response, Mr. Rocheleau reduced the amount by $1,191.58. He therefore seeks expenses in the amount of $29,008.12 inclusive of fees, disbursements and GST.

Allstate relied on the 30-day limitation set out in Rule 79 of the Dispute Resolution Practice Code (DRPC). It submitted that Mr. Rocheleau failed to apply for an Expense Hearing until 2 ½ years had elapsed and this delay was fatal to his claim for payment of his expenses.

Mr. Rocheleau responded that he was unfamiliar with the DRPC’s time lines and the Rules of Civil Procedure do not place time limits on seeking expenses. As well, his counsel had a busy trial schedule. Consequently, he failed to apply for an Expense Hearing in a timely manner. Mr. Rocheleau relied on Rule 81 of the DRPC in submitting that the time limit set out in Rule 79 should be set aside. Mr. Rocheleau submitted that Allstate has not been prejudiced by the delay and has benefited by having use of the funds payable to him as Expenses for the period since my Order.

Rule 79.1 of the DRPC provides:

Where an adjudicator has issued an order determining all issues in dispute except expenses, and the parties cannot agree on the entitlement to or amount of the expenses of the proceeding, either party may request, in writing, an appointment before an adjudicator to determine expenses provided that the request is made within 30 days from the date the decision on all other issues in dispute was issued.

Rule 81 provides:

Subject to the requirements of the Insurance Act and the Statutory Powers Procedure Act, the adjudicator may on such terms as he or she considers just:

(a) set aside any time limit set out in these Rules for doing any act, serving any notice, filing any document or holding any hearing.

(b) decide that any Rule does not apply in respect of a proceeding.

Rule 1.1 provides:

These Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.

On June 26, 2008, Allstate wrote to Mr. Rocheleau’s counsel enclosing the funds payable to Mr. Rocheleau pursuant to my Order of May 23, 2008. The letter included a request for a Bill of Arbitration Expenses in order to conclude the matter.³ A subsequent letter dated December 23, 2008, reiterated the request for Mr. Rocheleau’s proposal for resolution of arbitration expenses and referenced a telephone message left on November 3, 2008 and the previous letter of June 26.⁴

On December 9, 2010, Mr. Rocheleau wrote to Allstate asking “when we may expect to hear from you with respect to resolving costs in this matter.”⁵ An e-mail dated January 13, 2011 from Mr. Rocheleau’s counsel to Allstate’s counsel indicated that Mr. Rocheleau had recently provided a copy of his Bill of Expenses.⁶

On June 26, 2008, Allstate complied with my order. It made two written requests for a Bill of Expenses, the last on December 23, 2008. On October 25, 2010, Mr. Rocheleau submitted his Bill of Expenses to Allstate.⁷ In January 2011, dates were set for an Expense Hearing.

Mr. Rocheleau’s explanation for his delay in applying for an Expense Hearing is not compelling. To set aside the 30-day time limit set out in Rule 79 and extend it for a period of 2 years 6 months, for the reasons provided by Mr. Rocheleau would render the provision meaningless. Therefore, I find that Mr. Rocheleau is not entitled to his expenses of the hearing.

Quantum of Expenses:

In the event I have erred in finding that Mr. Rocheleau is not entitled to his expenses as a consequence of his delay in applying for an Expense Hearing, I have quantified the Expenses to which he would otherwise be entitled.

Allstate, in its submissions dated February 17, 2011, acknowledged that Mr. Rocheleau has a prima facie entitlement to his expenses. It further set out two objections to the quantum of expenses Mr. Rocheleau claimed. Mr. Rocheleau amended his claim for expenses by the amounts objected to by Allstate.

Arbitators have long avoided a line by line accounting for expenses in Arbitration proceedings. Generally Arbitrators apply a ratio of preparation to attendance between 2:1 and 4:1 depending on the complexity of the issues. I find that Mr. Rocheleau’s Bill of Expenses conforms to the principles upon which Arbitrators determine expenses. Therefore, but for his delay in seeking an Expense Hearing, I would have awarded Mr. Rocheleau his expenses of $29,008.12 inclusive of fees, disbursements and GST.

May 30, 2011

Denise Ashby Arbitrator

Date

Financial Services Commission of Ontario