Bassel Haddad v. Economical Mutual Insurance Company, 2013 ONFSCDRS 57

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2013 ONFSCDRS 57

FSCO A10-003390

BETWEEN:

BASSEL HADDAD

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

DECISION ON DISMISSAL AND EXPENSES

Before: Deborah Pressman

Heard: December 10, 2012, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: No one appearing for Mr. Haddad

Christopher Schnarr for Economical Mutual Insurance Company

Background:

The Applicant, Bassel Haddad, was injured in a motor vehicle accident on April 1, 2008. In February 2012, I conducted a preliminary issue hearing for statutory accident benefits under the Schedule.¹ In a decision dated July 5, 2012, I found that Mr. Haddad was entitled to attendant care benefits up to the two-year mark, but was not catastrophically impaired.

On July 27, 2012, Mr. Haddad’s counsel brought a motion to withdraw as his representative. At the same time Economical requested a hearing to determine its entitlement to expenses in respect of the preliminary issue hearing. The motion to remove Mr. Haddad’s counsel proceeded prior to the expense hearing and Mr. Haddad was advised that the motion may proceed in his absence if he does not attend. He was also advised to retain legal representation for the expense hearing.²

Mr. Haddad did not appear for the motion on September 21, 2012 and I allowed Mr. Haddad’s counsel to withdraw as his representative. Mr. Haddad’s main hearing was scheduled to proceed on December 10, 2012, and Economical agreed that the expense hearing proceed on that same day. Despite Notices, neither Mr. Haddad nor any representative on his behalf attended on December 10, 2012 and both the main hearing and expense hearing proceeded in his absence.

Issues:

The issues in this hearing are:

Is Mr. Haddad entitled to medical benefits, payments for the cost of examinations, special award, expenses and interest?
Is Economical entitled to its expenses incurred in respect of the arbitration hearing and if

so, in what amount?

Result:

Mr. Haddad’s claims are dismissed.
The parties shall bear their own expenses.

EVIDENCE AND ANALYSIS:

Dismissal

Mr. Haddad did not attend this arbitration and failed to prove his claims for further accident benefits. As a result, Mr. Haddad’s claims are dismissed, with the exception of those dealt with in my previous order of July 5, 2012.

The file shows that notices for all stages of this arbitration were sent to Mr. Haddad at the address he provided to FSCO.³ A Notice of Hearing was sent on February 2, 2012 and a Notice of Expense Hearing was sent on December 3, 2012. All of the notices stated:

If you or your representative do not attend at the motion/hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of the arbitration proceedings.

I am satisfied that these Notices complied with the requirements of section 6 of the Statutory Powers Procedure Act (“SPPA”).⁴ In addition, the case administrator left several telephone voice mails for Mr. Haddad on December 3, 4, and 6, 2012 regarding his arbitration and expense hearing and the significance of non-attendance.

Notwithstanding the notices and phone calls, Mr. Haddad did not appear for his arbitration and expense hearing on December 10, 2010 and Economical’s representative requested that the hearing proceed in his absence. I agreed. Subsection 7(1) of the SPPA and Rule 37.7 of the Code authorize proceeding in the absence of a party who is given notice and fails to attend a hearing.

In order to establish his entitlement to benefits, Mr. Haddad must provide evidence supporting his claims and prove his claims on a balance of probabilities. As Mr. Haddad did not attend to present any evidence, he failed to establish his entitlement to the benefits that were the subject of his December 10, 2012 hearing.⁵ As a result, I dismiss all of these claims as well as his claim for a special award, interest on overdue payments and expenses.

Expenses

I find that Economical is not entitled to its expenses of the arbitration and I order the parties to bear their own expenses for the reasons that follow.

Economical claimed $32,327.08 (inclusive of HST) for its legal expenses⁶ of the preliminary issue hearing on the basis that it was mostly successful. I disagree because I find that Economical was only partially successful in the preliminary issue hearing. Mr. Haddad did not attend this hearing and did not support his claim for expenses. In all of the circumstances, I find that the most reasonable result is for the parties to bear their own expenses of the arbitration.

The Expense Regulation requires an arbitrator to consider seven criteria in awarding all or part of the expenses incurred in respect of arbitration.⁷ The only criterion relevant to this decision is: “Each party’s degree of success in the outcome of the proceeding.” When one party is entirely successful and there are no other relevant criteria, the analysis is fairly simple. However, as in this case, when there is mixed success, the analysis is more complex because the Expense Regulation gives no guidance on applying the consideration of each party’s degree of success. In some cases, partially successful applicants have been awarded all of their expenses. In others they have been awarded a percentage of their expense. And in some mixed success cases, the parties have been ordered to bear their own expenses.⁸

Economical claimed that it was mostly successful in the preliminary issue hearing on the basis that its success on the catastrophic impairment issue trumps Mr. Haddad’s success on attendant care benefits in both dollar value and the time taken at the hearing. However, a party’s degree of success cannot be quantified by simply looking at the time taken at the hearing or the value of the claim recovered. Other factors, including the complexity of all the issues and their importance to the parties, are also considered.

I do not doubt that the issues involved in this arbitration were important to both parties. Apart from the money at issue, it was clearly important that Mr. Haddad’s injuries alleged to have been caused or contributed to by the accident be identified and understood, to the extent possible, upon available evidence. Economical submitted that Mr. Haddad’s conduct was a significant factor in the length of the hearing and should weigh in favour of awarding its expenses. However, I find that Mr. Haddad lost on the catastrophic impairment issue because he failed to marshal and adduce evidence necessary to make his case, not because he unduly prolonged the hearing. In my view, the result in the preliminary issue hearing reflects mixed success, with Economical being slightly more successful than Mr. Haddad because he did not succeed in the central dispute in the hearing, the catastrophic impairment determination. Mr. Haddad did succeed on attendant care benefits up to the two-year mark. This award, together with interest, is not an insignificant amount. Therefore, I find that Mr. Haddad was partially successful in his preliminary issue hearing.

The decision on awarding expenses based on degree of success must also be considered with the purpose for including this criterion. The purpose is to reward successful parties and penalize unsuccessful parties. As in this case, when there is mixed success, it may be reasonable to award an applicant all of his or her expenses when there is partial success, when the issues are intertwined or if the applicant was forced to a hearing in order to achieve an even minimal recovery. It would be an odd result if Mr. Haddad’s partial success is subsequently penalized by having to pay Economical’s entire legal costs. In fact, Economical did not present case law to support its position that an insurer should be awarded its entire expenses against a partially successful applicant. Despite his partial success, Mr. Haddad did not attend this proceeding and did not claim his expenses. For all the reasons mentioned above, I conclude that the most appropriate result, consistent with the criteria, is for the parties to bear their own expenses.

Economical submitted that I have the authority and discretion to set off any award of expenses against Mr. Haddad’s attendant care benefits and interest, which I determined were owing to him as a result of the preliminary issue hearing. Pursuant to my finding that the parties will bear their own expenses, I am not required to address Economical’s request to offset any award of expenses against benefits owed.

Economical also requested that I suspend any interest ordered and owing to Mr. Haddad for the period that it took to resolve this expense issue. Although there was a slight delay in scheduling the expense hearing, Economical agreed that it could proceed at the same time as Mr. Haddad’s main hearing on December 10, 2012. This period of approximately 10 months is not an unreasonable delay in conducting and concluding several proceedings in this arbitration, including a motion, an expense hearing and a final dismissal. Therefore, I was not convinced that a fairly reasonable delay, such as in this case, warrants such a remedy nor that I have the authority to do so.

Mr. Haddad’s claims are dismissed, with the exception of those dealt with in my previous order of July 5, 2012. The parties shall bear their own expenses. Interest will not be suspended.

May 2, 2013

Deborah Pressman

Arbitrator

Date