Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2013 ONFSCDRS 43
Appeal P10-00011
OFFICE OF THE DIRECTOR OF ARBITRATIONS
SECURITY NATIONAL INSURANCE CO./MONNEX INSURANCE MGMT. INC.
Appellant
and
BRUNARAJAN BALENDRA
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Amanda Lennox for Security National Insurance Co./Monnex Insurance Mgmt. Inc. (“Security National”)
Marko Djukic for Mr. Balendra
HEARING DATE:
On January 21, 2013, I confirmed to the parties that the matter would proceed on the record.
APPEAL EXPENSES ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Balendra shall pay Security National Insurance Co./Monnex Insurance Management Inc. its legal expenses of this appeal in the amount of $2,000, inclusive of disbursements and HST.
April 4, 2013
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
In Balendra and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO A08‑002455, May 13, 2010), Arbitrator Sampliner ordered that Mr. Brunarajan Balendra was not precluded from claiming statutory accident benefits despite being at work when he was involved in an automobile accident.
In Security National Insurance Co./Monnex Insurance Mgmt. Inc. and Balendra, (FSCO P10-00011, September 2, 2011), I overturned this decision.
Security National now seeks its appeal expenses.
II. BACKGROUND
The arbitration and appeal arose out of the interaction between a workers’ compensation claim and an automobile accident benefit claim. On August 16, 2007, a car hit the parking lot attendant booth in which Mr. Balendra was working. Pursuant to the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A, he applied for workers’ compensation benefits to the Workplace Safety and Insurance Board, claiming personal injury. The Board disallowed his claim for lack of evidence.
Mr. Balendra also applied for statutory accident benefits under the SABS–19961 from his automobile insurer. Security National denied the claim because s. 59(1) of the SABS provides that an insurer is not required to pay accident benefits where as a result of the accident the insured “is entitled to receive benefits under any workers’ compensation law or plan.”
The Arbitrator found that s. 59(1) did not apply because the issue of whether Mr. Balendra was entitled to receive worker’s benefits was still open.
I found that the Arbitrator erred in equating entitlement with qualification: Since Mr. Balendra was entitled to claim worker’s benefits because the accident occurred during employment, he could not claim accident benefits.
III. ANALYSIS
After I issued my decision, the Insurer sought its arbitration and appeal expenses.
In Balendra and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO A08-002455, June 18, 2012), the Arbitrator awarded Security National $1,246.14 for lawyer and legal assistant arbitration expenses, but deferred awarding disbursements because they were not allocated between arbitration and appeal.
Security National then submitted its Bill of Costs for the appeal, claiming over $7,500 in fees and around $500 in disbursements, totaling more than $9,000 including HST.
The issues are entitlement and quantum.
The criteria for entitlement are set out in the expense regulation.2 Security National relies on para. 1: “Each party’s degree of success in the outcome of the proceeding.”
Mr. Balendra relies on para. 3: “Whether novel issues are raised in the proceeding.” He submits that the Insurer is not entitled to costs of the appeal hearing because he “was overturned on appeal by virtue of a novel interpretation of the law.”
Security National raised the novelty issue before the Arbitrator, who rejected it because of my “opinion that the law and process concerning entitlement between the two statutory schemes is quite clear” and I “decided the matter on the established law.”
Likewise, I reject Mr. Balendra’s submission that I applied a novel interpretation of the law.
Mr. Balendra submits that “awarding costs against the Applicant would be contrary to the protective and remedial purposes of the Insurance Act.” However, since s. 282(11) of the Act provides for expense awards to insurers, it cannot be contrary to the Act to make them.
I find that because of its success on appeal Security National is entitled to its reasonable appeal legal expenses under para. 1.
Turning to quantum, Security National provided no copies of supporting documentation for the disbursements. The issue was raised in Mr. Balendra’s Response of January 3, 2013. The disbursements are disallowed.
Mr. Balendra submits that both Ms. Lennox and Ms. Brown have entries for preparing the factum and brief of authorities, adding: “Ms. Lennox claims 10.3 hours with respect to the same, while Ms. Brown claims an incredible 81.6 hours.” He also notes a ratio of 46:1 between the claimed preparation time of 139.4 hours and the attendance time of 3.0 hours.
Expenses should be assessed globally with the overriding consideration of reasonableness. While a strict reliance on ratios is not necessarily apt in appeals because appeals hearings are short but may require lengthy preparation, a ratio of 46:1 is noteworthy.
I find the amount claimed by Security National is duplicative and excessive. In Brookes and Aviva Canada Inc., (FSCO P09-00004, November 21, 2012), I awarded $4,000 because Aviva had to prepare for and attend both preliminary issue and main appeal hearings and had to respond to voluminous submissions. Here, there was one hearing and less documentation.
I find that the award should be closer to the average award to insurers of $2,800 as set out in Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010).
I find that $2,000, inclusive of HST, is appropriate.
April 4, 2013
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.
- Subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended.