Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2013 ONFSCDRS 33

Appeal P12-00028

MICHAEL WENTZEL Appellant

and

RBC GENERAL INSURANCE COMPANY Respondent

BEFORE: David Evans

REPRESENTATIVES: Nicole Corriero for Mr. Wentzel Donata Di Iorio for RBC General Insurance Company

HEARING DATE: On January 21, 2013, I confirmed to the parties that the matter would proceed on the record.

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The Arbitrator’s decisions of February 10, 2012 and May 9, 2012 are confirmed and this appeal is dismissed.
Mr. Michael Wentzel shall pay RBC General Insurance Company’s legal appeal expenses of $631.00, inclusive of HST.

March 15, 2013

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Michael Wentzel, Licensed Paralegal for LSW Legal Services and representative of Corinne Warren Hancock, deceased, appeals Arbitrator Wilson’s orders in Hancock and RBC General Insurance Company, (FSCO A11-000896, February 10, 2012) and (FSCO A11-000896, May 9, 2012), ordering him to pay RBC’s arbitration expenses.

II. BACKGROUND

Ms. Hancock, RBC’s insured, was injured in a motor vehicle accident on February 18, 2009. She claimed accident benefits from RBC under the SABS–1996,¹ and Mr. Wentzel represented her.

Mr. Wentzel filed an Application for Mediation of Ms. Hancock’s claims. Mediation took place, with a Mediator’s Report issued on September 2, 2010. Mr. Wentzel then completed an Application for Arbitration in her name, claiming past and ongoing non-earner benefits and housekeeping expenses.

The Financial Services Commission received the Application on March 22, 2011. However, Ms. Hancock had died on August 14, 2010, for causes not related to the accident.

RBC moved for a dismissal of the arbitration as a nullity because of Ms. Hancock’s death and for payment of its arbitration expenses by Mr. Wentzel for commencing an unauthorized proceeding.

In his February 2012 interim decision, Arbitrator Wilson noted that there was no evidence before him that anyone had undertaken to administer Ms. Hancock’s estate in Ontario. He concluded that the application was not properly constituted and was, at the Commission, an irremediable nullity. He also put Mr. Wentzel on notice that he might be liable to pay arbitration expenses.

However, Arbitrator Wilson deferred issuing a final order pending word directly from the person claimed by Mr. Wentzel to be the presumptive estate administrator, Ms. Hancock’s son Scott Warren. This was to allow Mr. Warren to take action in a court of competent jurisdiction or to prove he validly acted for the estate and that he was “prepared to endorse Mr. Wentzel’s actions in this matter, including taking the responsibility of a full party for any costs or expense orders to be made in this matter.”

The matter then returned before the Arbitrator. In his May 2012 final decision, he noted that Mr. Warren had been put on notice that, without positive action by someone to administer the estate and authorize the arbitration application, the matter must be dismissed. Seeing no proof of that action, he dismissed the arbitration.

The Arbitrator then found Mr. Wentzel personally liable for arbitration expenses of $2,138.52 under ss. 282(11.2)(a) and (b) of the Insurance Act, discussed below.

III. ANALYSIS

On a preliminary note, RBC objected to this appeal on the grounds that Mr. Wentzel had no basis for bringing it. However, a representative against whom arbitration expenses are imposed has a right of appeal: see another appeal involving expenses against a representative, namely Rooz and Certas Direct Insurance Company, (FSCO P07-00017, March 26, 2009), upheld on judicial review in Rooz v. Certas Direct Ins. Co., 2010 ONSC 2773. As in Rooz, I have changed the style of cause to reflect the fact the appeal was brought by Mr. Wentzel.

Subsection 282(11.2) of the Act allows arbitrators to make an order requiring a person representing an insured person or an insurer for compensation in an arbitration proceeding to personally pay all or part of any expenses awarded against a party² if the arbitrator is satisfied that certain criteria have been met. The chief criterion in this case is that in s. 282(11.2)(a), applicable where, “in respect of a representative of an insured person, the representative commenced or conducted the proceeding without authority from the insured person or did not advise the insured person that he or she could be liable to pay all or part of the expenses of the proceeding.” While s. 282(11.3) provides an exception to clause (11.2)(a) for “a barrister or solicitor acting in the usual course of the practice of law,” Mr. Wentzel is a paralegal. And while s. 282(11.4) provides that “An order under subsection (11.2) shall not be made unless the representative is given a reasonable opportunity to make representations to the arbitrator,” Mr. Wentzel received notice from and made submissions to the Arbitrator about the issue.

The Arbitrator found in his final decision that

Clearly, in this matter [Mr. Wentzel] can be seen to have: “commenced or conducted the proceeding without authority from the insured person.” After all, the named Applicant died many months before the Application for Arbitration was delivered.

Mr. Wentzel submits that the Arbitrator should have considered the evidence and applied the law as he had in Bittan (Estate of) and CGI Insurance Company of Canada, (FSCO A00-001005, November 27, 2001). In Bittan, Arbitrator Wilson found that remediation was available where an estate administrator had been appointed after the application for arbitration was filed.

While in this case the Arbitrator found that, based on case law since Bittan, remediation in like circumstances is not available at the Commission, the factual basis for remediation is missing in this case anyway. The alleged “evidence” Mr. Wentzel refers to was flagged by the Arbitrator in his interim decision, when he noted that

Some weeks after the hearing was completed Mr. Wentzel wrote to the arbitrator, enclosing what appeared to be a broad authorization to act on behalf of Mr. Scott Warren. Given the absence of any request to re-open the motion hearing to receive further evidence, and my decision to allow an opportunity to Mr. [Warren] to respond personally to this interim decision, I have not considered the new material in the context of this decision.

In his final decision, the Arbitrator noted that the documents only confirmed that Mr. Warren “was considering taking further action to obtain probate or administration of his mother’s estate” and that he, the Arbitrator, had not considered them “because, as evidence, the documents were of questionable reliability and probative value,” and, finally,

Even if they were to be admitted, they do not address the principal question in this matter — that is whether anyone has taken the necessary action to administer the estate, and obtained the necessary court order to do so. The document at best speaks to a conditional intention — that is if there are funds to warrant administration, but not positive action. As such, it does not change the situation.

Accordingly, even if remediation were available, there would be no factual basis for it. Unlike in Bittan, nothing has been done to appoint an administrator. There is thus no error in the Arbitrator’s decisions.

The appeal is dismissed and the Arbitrator’s decisions confirmed.

IV. EXPENSES

Subsection 12(2) of the Expense Regulation, reproduced as Rule 75.2 in Section F of the Dispute Resolution Practice Code, Fourth Edition – Updated August 2011 (the “Code”), 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 [or appeals] proceeding.” RBC was wholly successful on the appeal and as such is entitled to its expenses pursuant to criterion (a), namely “each party’s degree of success in the outcome of the proceeding.” I see no possible basis on which Mr. Wentzel could receive his expenses of this appeal, nor any reason why RBC should not receive its expenses.

RBC sets out its claimed expenses of $631.00 in its written submissions. The hours claimed by the Insurer’s counsel are at the appropriate Legal Aid rate. Mr. Wentzel’s response to those submissions do not raise any issue with the amount claimed. Since this appeal was brought by Mr. Wentzel, he is responsible to pay them. Accordingly, I order that Mr. Wentzel pay RBC its appeal expenses of $631.00, inclusive of HST.