Neutral Citation: 2013 ONFSCDRS 147

FSCO A09-002810

BETWEEN:

JEYANATHAN ANTHONYPILLAI

Applicant

and

TD HOME AND AUTO INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Arbitrator Jeffrey Rogers

Heard: By oral argument on August 28, 2013, at the offices of the Financial Services Commission of Ontario in Toronto, and written submissions completed on September 24, 2013

Appearances: Mr. David S. Wilson, solicitor for Mr. Anthonypillai Ms. Janet S. Young, solicitor for TD Home and Auto Insurance Company

Issues:

The Applicant, Jeyanathan Anthonypillai, was injured in a motor vehicle accident on August 10, 2008. He applied for arbitration of his claims for further statutory accident benefits payable by TD Home and Auto Insurance Company (TD Home) under the Schedule.¹ On January 11, 2011, the parties agreed to settle some of Mr. Anthonypillai’s claims on terms that TD Home would pay his arbitration expenses with regard to the settled claims, to be agreed or assessed. The parties could not agree and therefore requested a hearing.

The issue in this further hearing is:

What is the amount of the expenses to which Mr. Anthonypillai is entitled with respect to the claims settled on January 11, 2011?

Result:

Mr. Anthonypillai is entitled to expenses in the amount of $13,140.18, being $14,140.18 awarded in this hearing, less $1,000 Mr. Anthonypillai owes to TD Home.

BACKGROUND:

The issue in this hearing arises out of a partial settlement of Mr. Anthonypillai’s claim for further accident benefits. The parties agreed to settle claims for medical and rehabilitation benefits, housekeeping and home maintenance benefits, and attendant care benefits. TD Home agreed to pay expenses of the arbitration with respect to those benefits.

The parties negotiated the settlement when they attended for the start of the hearing on all issues. The hearing was adjourned because of Mr. Anthonypillai’s late disclosure of his income information and of his post-accident employment. The arbitrator ordered Mr. Anthonypillai to pay expenses of the adjournment in the amount of $1,000. Payment has not been made.

The parties later agreed to settle Mr. Anthonypillai’s claims for further income replacement benefits, further assessments or examinations, a special award. They also agreed to settle the expenses of arbitrating those issues. TD Home has paid expenses it was ordered to pay with regard to a motion for interim benefits and the parties settled Mr. Anthonypillai’s claim for expenses of a motion TD brought for further medical examinations.

Mr. Anthonypillai claims additional legal fees of $9,113.25 (60.755 hours @ $150 per hour), plus disbursements of $9,730.85, plus HST.

ANALYSIS:

Fees

TD Home submits that the claim for legal fees is excessive, given the lack of complexity of the issues that were settled, and given the fact that there is no distinction in the Bill of Costs for work relating to the issues that were not settled. TD Home did not specify how much of a reduction should flow from this submission. Mr. Anthonypillai concedes that the Bill includes work relating to the issues that were later settled and therefore a reduction is appropriate. He suggests a reduction of no more than 25%. I find a reduction of 40% to be appropriate.

The most complicated issue in the arbitration was the claim for IRBs that was later settled. That was the only issue requiring assessment of the post-104 test for entitlement. I consider that to be a significant factor in assessing the percentage of the total bill that is attributable to issues that were not settled.

The Bill of Costs claims 60.755 hours of counsel time. I find that to be excessive. Given all of the issues, I find 50 hours to be more appropriate. That is still more than a week of full-time work, before the hearing. I make this finding bearing in mind that although this arbitration was fraught with procedural skirmishing and interlocutory applications, the expenses of the interlocutory proceedings have already been adjudicated or settled.

I reject TD Home’s further submissions that the expenses should be reduced to reflect partial success and undue prolonging of the process.

TD Home agreed to pay expenses of the settled issues. In my view, the submission that Mr. Anthonypillai’s degree of success should be considered is a collateral attack on that agreement.

The conduct that allegedly prolonged the proceeding is Mr. Anthonypillai’s late disclosure of his income information and of his post-accident employment. TD Home conceded that the order of $1,000 in expenses that the arbitrator made in its favour upon adjourning the hearing was intended to compensate for this conduct. Reducing the fees Mr. Anthonypillai claims would duplicate the penalty already imposed.

Reducing the 50 total hours by 40% means that Mr. Anthonypillai is entitled to 30 hours for legal fees with regard to the settled issues. I find the claimed rate of $150 per hour to be appropriate, given Mr. Wilson’s experience and expertise. Mr. Anthonypillai is therefore entitled to legal fees of $4,500, plus HST of $585.

Disbursements

Mr. Anthonypillai concedes that disbursements in the amount of $1,608.40, claimed for a report from the Centre for Educational Development and the ABC Group Employment file, should be deducted because they relate solely to the IRB issue.

TD Home argued that some claimed disbursements likely duplicate disbursements it was earlier ordered to pay Mr. Anthonypillai. TD Home presented no evidence in support of this argument and I have found none in the record of the prior expense hearing.

I find the other claimed disbursements to be reasonable and recoverable, with the following exceptions:

Since the arbitration was scheduled in the municipality in which counsel maintains his office, the Expense Regulation does not permit recovery of mileage. The Bill does not contain a separate charge for parking. I therefore deduct $59.75.
The claims for photocopies, fax, courier and interpreter fees presumably include expenditures with regard to the claims that were not settled and should be reduced by the same percentage as the fees. The 40% reduction results in a recovery of $1,640.70 for those items.

After the above adjustments, Mr. Anthonypillai is entitled to disbursements of $8,024.90 plus HST of $1,030.28.

Expenses of this Hearing

Based on their mixed success, and there being no evidence of a proposed compromise that could have made this further hearing unnecessary, I find that the parties should bear their own expenses of this hearing.

Set off

TD Home submits that it should be permitted to set off the $1,000 in expenses that Mr. Anthonypillai owes against any order in his favour. Mr. Anthonypillai argued that there is no precedent for such an order. Counsel declined an opportunity to make further written submissions on the issue. In fact, an Arbitrator’s jurisdiction to order a set off of mutual debts is well established.

In Boodhai and Allsatate Insurance Company of Canada² the Director’s Delegate confirmed the Arbitrator’s order setting off expenses awarded the insured person, against repayment of benefits. The Delegate found that the jurisdiction to do so is derived from “a purposive interpretation of the provisions of the Insurance Act and the regulations.”³

Since that decision, Arbitrators have set off the expenses payable to the insured person, against expenses payable by the insurer in Chahal and Zurich Insurance Company⁴, Tyrell and RBC General Insurance Company⁵, Singh and Wawanesa Mutual Insurance Company⁶ and Ritchie and West Elgin Mutual Insurance Company⁷. In my view, the circumstances in this case warrant an order setting off what Mr. Anthonypillai owes, against the expenses he is now awarded.

SUMMARY

Mr. Anthonypillai is entitled to legal fees of $4,500, plus HST of $585.

Mr. Anthonypillai is entitled to disbursements of $8,024.90 plus HST of $1,030.28.

Mr. Anthonypillai is therefore entitled to fees disbursements of $14,140.18 inclusive of HST. After setting off the $1,000 that Mr. Anthonypillai owes, TD Home shall pay Mr. Anthonypillai $13,140.18.

November 19, 2013

Jeffrey Rogers Arbitrator

Date

Financial Services Commission of Ontario