Tipu v. Chartis Insurance Company of Canada, 2014 ONFSCDRS 120

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 120

FSCO A13-006676

BETWEEN:

MUHAMMAD TIPU

Applicant

and

CHARTIS INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before: Deborah Pressman

Heard: Written submissions received April 3, 2014

Appearances: Mr. Tipu not responding or appearing at this arbitration hearing

Bevin Shores for Chartis Insurance Company of Canada

Issue:

Should Mr. Tipu’s Arbitration be dismissed?
Is Chartis entitled to its expenses incurred in respect of this arbitration?

Result:

Mr. Tipu’s arbitration is dismissed.
Chartis is entiled to its expenses in the amount of $2,983.97 (inclusive of all costs, disbursements, and taxes).

Background:

The Applicant, Muhammad Tipu, was injured in a motor vehicle accident on August 30, 2010 and claimed certain benefits from Chartis. Shortly after his application for arbitration was filed, Mr. Tipu’s representative requested to be removed as counsel of record as he was unable to locate Mr. Tipu and seek instructions. Chartis objected to the removal of Mr. Tipu’s representative on the basis that the representative was liable to personally pay the expenses of the arbitration. On February 13, 2014, I issued my decision and made the following orders:

Mr. Tipu’s representative was allowed to withdraw as counsel of record in this arbitration.
Expenses were not payable personally by Mr. Tipu’s representative.

Mr. Tipu, was informed by letter that Chartis requested a dismissal of his arbitration application without a hearing, pursuant to Rule 68 of the Dispute Resolution Practice Code, given his non participation. Mr. Tipu was given 20 days to object to the dismissal of his application and respond to Chartis’ request for expenses of the arbitration.¹ No response has ever been received and I am satisfied that Mr. Tipu does not intend to proceed with his arbitration. Mr. Tipu’s claims for benefits outlined in the Application for Arbitration are therefore dismissed.

EXPENSES:

I find that Chartis is entitled to its expenses of the arbitration, which I fix at $2,983.97 (inclusive of all costs, disbursements, and taxes).

Chartis claimed $5,983.97 for its expenses of the arbitration. A party’s entitlement and quantum of expenses is determined by applying criteria prescribed by the legislation.² I find that the criterion, “each party’s degree of success in the outcome of the proceeding,” is relevant in this case. Mr. Tipu did not succeed in asserting his claims for benefits, his arbitration was dismissed and he is not entitled to his expenses. Chartis, as the “successful party”, is entitled to its reasonable expenses.

Of the $5,983.97 claimed for expenses, $3,000.00 is for the refund of Chartis’ arbitration assessment fee. Until recently, this type of expense was not recoverable by an insurer. A recent amendment under the Expense Regulation (i.e., the addition of section 7 to the Schedule of O. Reg. 664, R.R.O. 1990) now allows an insurer to seek reimbursement of such an expense in very limited circumstances.

Chartis alleged that the requisite circumstances exist in this case to justify this reimbursement. Section 7 provides that the assessment fee(s) may be refunded if the insured failed to submit to an insurer examination, or failed to provide materials required. In its Costs Outline, Chartis submitted that Mr. Tipu refused or failed to attend a section 44 insurer examination on March 25, 2011. However, the evidence adduced to support the assertion was insufficient. For example, there was insufficient evidence before me that Chartis complied with section 44 on issues of notice and reasonableness.³ Therefore, I have no evidence that Mr. Tipu either refused to submit to an examination or failed to provide any required information and as a result, I decline to award Chartis the return of its $3,000.00 assessment fee.

The balance of Chartis’ claim is $2,983.97. In considering the number of hours of legal services (and permitted hourly rate) that can reasonably be claimed with respect to this matter, I find that $2,983.97 (inclusive of all costs, disbursements, and taxes) is appropriate and permitted under the Expense Regulation.

Pursuant to subsection 282(11) of the Insurance Act, Mr. Tipu is ordered to pay Chartis’ expenses in the amount of $2,983.97.

July 21, 2014

Deborah Pressman

Arbitrator

Date