Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2012 ONFSCDRS 26
Appeal P11-00012
OFFICE OF THE DIRECTOR OF ARBITRATIONS
ECONOMICAL MUTUAL INSURANCE COMPANY Appellant
and
SIVAKUMARU SINNAPU Respondent
BEFORE: Delegate Lawrence Blackman
REPRESENTATIVES: Mr. Ian D. Kirby for the Appellant, Economical Mutual Insurance Company Mr. David S. Wilson for the Respondent, Mr. Sivakumaru Sinnapu
HEARING DATE: By written submissions extended to February 22, 2012
APPEAL EXPENSES ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The Appellant, Economical Mutual Insurance Company, shall pay the Respondent, Sivakumaru Sinnapu, his legal expenses of this appeal fixed in the amount of $3,559.50, inclusive of HST.
March 5, 2012
Lawrence Blackman Director’s Delegate Date
REASONS FOR DECISION
I. BACKGROUND
This appeal pertains to entitlement to and the amount of a special award. My November 1, 2011 decision dismissed the appeal. If the parties were unable to agree on legal expenses, an expense hearing was to be requested within thirty days, in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition − Updated August 2011) (the “Code”).
The Respondent, Mr. Sivakumaru Sinnapu, requests his legal expenses of $3,559.50; 20.9 hours at $150 an hour, plus HST and disbursements of $16.95. He submits that only criterion “a” in subsection 12(2) of R.R.O. 1990, Reg. 664 (the “Expense Regulation”) is applicable, that he was entirely successful in this appeal.
The Arbitrator’s July 30, 2010 decision fixed the special award at “40% of the benefits and interest that were outstanding at the time that the issue of income replacement benefits [IRBs] was finally resolved by the parties.” My earlier, substantive, decision noted the parties’ agreement that the benefits and interest outstanding when the IRB issue was finally resolved was $19,335.55. Accordingly, the special award would have been $7,734.22.
However, a January 5, 2011 letter of the Appellant, Economical Mutual Insurance Company, entered as an exhibit at the appeal hearing, notes the Appellant paying $16,345.88 for the special award and $2,270.26 as interest on that award. In oral submissions, the parties could not advise how the $16,345.88 was calculated. However, $16,345.88 is also the precise amount the Appellant paid for IRB arrears following the Arbitrator’s October 16, 2009 interim benefits decision.
My November 1, 2011 decision stated that:
The Appellant does not argue that the Arbitrator erred in ordering interest paid on the special award, nor is it argued that the Arbitrator ordered interest on the special award. Persofsky [Liberty Mutual Insurance Company and Persofsky et al., (FSCO P00-00041, January 31, 2003)] states that interest is not payable on the lump sum special award except as part of the enforcement process. I am not aware of any enforcement process in this case. If there is an error in this interest payment, I do not see that it arises from an error of law by the Arbitrator.
I further held that:
My jurisdiction in this proceeding is restricted to addressing alleged errors of law in the Arbitrator’s orders. My authority does not extend to speculating why incorrect amounts may have been paid. Nor am I asked to correct possible errors made by the parties themselves. Accordingly, the Arbitrator’s July 30, 2010 and December 3, 2010 decisions are confirmed and this appeal is dismissed.
By letter dated February 8, 2012, the counsel for the Appellant wrote that he accepted the appropriateness of $3,559.50 for legal expenses. However, he noted there appeared to have been “some error in the amount of the special award previously paid by my principal.” Investigation had now unearthed that the special award was $7,446.46, 40% of the $18,616.14 the Appellant had previously paid in arrears ($16,345.88) and interest ($2,270.26). The Appellant stated that in error, it paid the $18,616.14 a second time as the special award.
The Appellant submitted that there is an $11,169.68 overpayment. Reducing this by the Respondent’s appeal expenses of $3,559.50 would leave a net overpayment of $7,610.18. The Appellant indicated a willingness to work out a repayment plan with the Respondent.
The Respondent does not agree to a consent order. He argued that legal expenses are a separate matter that cannot be set off against an alleged, unproven debt. The Appellant responds that this issue must be resolved by a Commission adjudicator. It is content that I determine this issue or that it be referred back to the Arbitrator.
I have declined to determine the claimed overpayment. I am not persuaded as to my jurisdiction. Adjudicators at the Commission are “creatures of statute,” their powers limited to that which the Legislature bestows. Subsection 283(1) of the Insurance Act, R.S.O. 1990, c. I.8, limits appeals to errors of law by the Arbitrator. The Appellant provides no submissions as to how I have jurisdiction to address its, now conceded, own error in the amount paid as a special award.
In any event, I have previously addressed this, as set out above. The only present remaining issue before me is appeal expenses, the jurisdiction for which is subsections 283(7) and (10) of the Insurance Act. The Appellant has not sought a further extension of time to provide its expense submissions that had been due January 24, 2012. Accordingly, my February 23, 2012 letter stated that I would proceed to determine entitlement to and the quantum of legal appeal expenses.
II. ANALYSIS
I find that the Respondent is entitled to his reasonable legal expenses of this appeal, based most significantly on his success in the outcome of this proceeding. A further consideration is that at least the issue of the quantum of the special award appears to have been, to a significant degree, unnecessary. The Appellant’s concern in this regard now appears to stem largely not from what the Arbitrator ordered but what the Appellant paid in error.
In any event, the Appellant, subject to set off, concedes the Respondent’s entitlement to his legal expenses and the quantum sought. I find the requested 20.9 hours reasonable. Counsel on both sides were professional and efficient throughout. Legal arguments were helpful. I have no hesitation awarding the $150 hourly rate sought. I also find the minimal disbursements of $16.95 requested to be reasonable.
Accordingly, I find the Respondent entitled to his legal expenses of this appeal fixed in the amount of $3,559.50, inclusive of HST.
March 5, 2012
Lawrence Blackman Director’s Delegate Date