Intact Insurance Company v. Margie Bateman, 2014 ONFSCDRS 15

Commission des services financiers de l’Ontario

Neutral Citation: 2014 ONFSCDRS 15

Variation P13-00039V

OFFICE OF THE DIRECTOR OF ARBITRATIONS

INTACT INSURANCE COMPANY Applicant

and

MARGIE BATEMAN Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Ms. Deborah G. Neilson for the Applicant, Intact Insurance Company Mr. Gordon Good for the Respondent, Ms. Margie Bateman

HEARING DATE: January 20, 2014. The decision with reasons was provided orally the same day, with full written reasons to follow.

VARIATION / REVOCATION ORDER

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

Pursuant to Rule 70 of the Dispute Resolution Practice Code (Fourth Edition – Updated August 2011), the Applicant, Intact Insurance Company, is permitted to withdraw its December 18, 2013 Application for Variation/Revocation from the Arbitrator’s motion decision dated November 26, 2013, on the term that it pay the Respondent forthwith and in any event of the arbitration result, her legal expenses fixed in the amount of $300, inclusive of all fees, disbursements and HST.

January 27, 2014

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The Respondent, Ms. Margie Bateman, was injured in a motor vehicle accident on February 14, 1996. As a result, she applied for statutory accident benefits pursuant to the Schedule¹ from her first-party automobile insurer, at the time Zurich Insurance Company, which is now the Applicant, Intact Insurance Company.

This proceeding pertains to the November 26, 2013 motion decision of Arbitrator Alves (the “Arbitrator”). The Commission received Intact Insurance Company’s Application for Variation/Revocation on December 18, 2013. At the same time, the Commission received Intact’s Notice of Appeal arising from the same arbitration decision.

My December 19, 2013 acknowledgement letter noted that Rule 61.1 of the Dispute Resolution Practice Code (Fourth Edition, Updated - August 2011) (the “Code”), provides that:

61.1 Either the insured person or the insurer may apply to the Director to vary or revoke an arbitration order or an appeal order if:

(a) there has been a material change in the circumstances of the insured;

(b) evidence not available on the arbitration or appeal has become available; or

I cited Arbitrator Wilson’s decision in Olszewski and Citadel General Insurance Company, (FSCO A03-000765, December 16, 2004), that an “error in the order” would perhaps include an inconsistency between the form of the order and the result shown in the body of the decision. It would not likely be available for an error in law or an error in the arbitrator’s reasoning process.

I noted that Delegate Evans, in Rooz and Certas Direct Insurance Company and Zapisnoy,

(FSCO P07-00017, March 26, 2009), cited Olszewski. In Johnston and AXA Insurance (Canada), (FSCO P08-00008V, May 1, 2008), I agreed with Arbitrator Wilson.

I also noted that Rule 61.4(c) of the Code provides that an Application for Variation/Revocation may be rejected if it is in respect of an order that has been appealed and the appeal is pending. Rule 61.4(a) provides that the Application may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute. My acknowledgement letter noted:

(1) Intact, as it stated in its Application, had filed a Notice of Appeal from the same motion decision of the Arbitrator.

(2) Intact’s Application for Variation/Revocation, as it noted, was from a preliminary or interim arbitration order.

I arranged timelines for written submissions on the preliminary issue of whether this Application should be rejected on the basis either (1) there was an appeal pending from the same arbitration decision or (2) that the Application was from a preliminary or interim order that did not finally decide the issues in dispute. The parties agreed to January 20, 2014 for oral submissions by teleconference.

On January 3, 2014, Ms. Bateman filed her responding preliminary issue submissions in this Application. My letter of the same date noted that her submissions appeared to be the same as her submissions regarding the Notice of Appeal. Ms. Bateman had not addressed, as requested, whether the Application for Variation/Revocation should be rejected pursuant to Rule 61.4(c), that is, it was in respect of an order that has been appealed and the appeal was pending

On January 8, 2014, Ms. Bateman delivered six pages of amended submissions addressing Rules 61.1 and 61.4 of the Code.

Rule 65.6 of the Code provides that an adjudicator may clarify a decision or order that contains a misstatement, ambiguity or other similar error. On December 3, 2013, Intact sought clarification from the Arbitrator regarding her order. Ms. Bateman responded by letter dated December 9, 2013. Intact states that Ms. Bateman’s letter only reached the Arbitrator on December 18, 2013. The Arbitrator replied December 20, 2013. My acknowledgement letter in this Application proceeding was sent the prior day. Intact’s counsel states that she was away from the office from December 18 to 29, 2013.

On January 15, 2014, the day its reply submissions were due on the preliminary issues in this Application, Intact wrote this office and the Respondent:

Please be advised that in light of the clarification of the Arbitrator dated December 20, 2013, Intact Insurance Company is withdrawing its application for variation/revocation in the above-noted matter.

My January 15, 2014 letter stated:

Rule 70.1 of the Dispute Resolution Practice Code (Fourth Edition, Updated – August 2011) provides that a party may seek permission to withdraw all or part of a dispute by serving and filing a request to withdraw. A party may also make an oral request to withdraw all or part of a dispute at a preliminary conference or at a hearing.

Rule 70.2 provides that an adjudicator may permit a party to withdraw all or part of a dispute where all parties agree. Rule 70.3 states that where a party does not agree to the withdrawal, an adjudicator may permit the withdrawal on such terms and conditions as he or she considers just and may award expenses to either party as permitted by Rule 75 and following.

Thus, pursuant to Rule 70, withdrawal of a dispute is not automatic. Rather, permission must be sought from an adjudicator.

Intact’s January 15, 2014 letter did not say that both parties agreed to the withdrawal. It did not say that it was seeking a consent withdrawal order. My January 15th letter thus stated that submissions could be received at the previously arranged January 20, 2014 oral hearing on whether Intact’s withdrawal was on consent and, if not, what terms and conditions might be just.

At the January 20, 2014 oral submissions, Intact confirmed it was seeking to withdraw its Application for Variation/Revocation. Ms. Bateman consented to the withdrawal on the condition that Intact pay $300 in legal expenses. This sum represented 2.9 hours of counsel time, the counsel in question having been called to the bar seven or eight years earlier.

Intact argued that expenses not be awarded as a condition of its withdrawal of its Application. It submitted that (a) it was necessary to bring this Application to obtain clarification of the Arbitrator’s order, (a) Ms. Bateman had delayed the Arbitrator’s response to Intact’s request for clarification, and (c) by having requested that Intact withdraw its Application, Ms. Bateman should be deemed to have consented to its withdrawal.

Intact argued that Rule 70.3 of the Code means that only where a party does not agree to the withdrawal may an adjudicator permit the withdrawal on terms and conditions as the adjudicator considers just and award legal expenses as permitted by Rule 75.

I am permitting Intact to withdraw its Application for Variation/Revocation, but on terms.

The timing of the Arbitrator’s motion decision, with the holiday season and the January 28, 2014 arbitration hearing pending, created tight time lines. Nonetheless, to whatever extent Ms. Bateman may have delayed the Arbitrator’s response, the Arbitrator did write the parties on December 20, 2013. Intact’s lawyer was back in her office on December 30, 2013. Ms. Bateman provided her amended submissions on January 8, 2014 addressing the variation/revocation Rule 61. On January 15, 2014, Intact advised it was withdrawing its Application for Variation/Revocation.

Ms. Bateman has been put to unnecessary expense. Ms. Bateman’s letter that I am told requested that Intact withdraw this Application was not filed before me. What, if any, agreement might be deemed to have been reached by the parties as to the terms or absence of terms of any withdrawal order is unclear. Intact objected to Ms. Bateman advising me of the content of other correspondence between the parties pertaining to preliminary issues in the companion appeal proceeding. On January 20, 2014, in oral submissions, Ms. Bateman agreed to the withdrawal on the explicit condition of an expense award.

I find that the modest expense award requested is a just condition of the withdrawal, specifically given the intent of Rule 61.4(c) of the Code that appeals and variation/revocation applications not be filed simultaneously. Intact submitted that the Legal Aid Services Act, 1998, to which legal expenses are subject under Rule 78 of the Code, allows only an $87.50 hourly rate for the experience rating in question. This provides a total award of $285.75, including HST. While making clear that it was maintaining its position that no expense award was warranted, Intact objected, in any event, to the additional $14.25.

Rule 78.1, to which Rule 75 of the Code specifically refers, allows the hourly rate for representatives of insured persons to be increased to $150 an hour. Pursuant to this rule, I add $14.25 for a round figure of $300.

January 27, 2014

Lawrence Blackman Director’s Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended.