Financial Services Commission of Ontario
Neutral Citation: 2014 ONFSCDRS 200 FSCO A12-004855
BETWEEN:
BRIAN KATAWARU Applicant
and
RBC GENERAL INSURANCE COMPANY Insurer
DECISION ON PRELIMINARY ISSUES
Before: Arbitrator Jeffrey Rogers Heard: September 10, 2014, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on: November 19, 2014. Appearances: Ms. Marlett Dobson, solicitor for RBC General Insurance Company
Issues:
RBC General Insurance Company (“RBC”) requests an order dismissing this arbitration and directing repayment of benefits.
The Applicant, Brian Katawaru, claimed that he was injured in a motor vehicle accident on June 21, 2010. He applied for and received statutory accident benefits from RBC, payable under the Schedule.1 Disputes arose regarding his entitlement to further claimed benefits. The parties were unable to resolve their disputes through mediation, and Mr. Katawaru applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
A pre-hearing discussion was held on June 4, 2013. The pre-hearing Arbitrator scheduled this preliminary issues hearing.
The preliminary issues are:
- Was Mr. Katawaru injured as a result of an “accident” as defined in section 2(1) of the Schedule?
- Is Mr. Katawaru liable to repay benefits paid to him by RBC because of wilful misrepresentation?
- Is Mr. Katawaru liable to pay RBC its expenses of this arbitration, and if so, in what amount?
Result:
- Mr. Katawaru was not injured as a result of an “accident” and his application for arbitration is therefore dismissed.
- Mr. Katawaru shall repay to RBC the sum of $2,762.79 paid to him for attendant care, and $3,209.04 paid to him for housekeeping and home maintenance, totalling $5,971.83.
- Mr. Katawaru shall pay to RBC its expenses of the arbitration in the amount of $4,937.77.
EVIDENCE AND ANALYSIS:
Background
Mr. Katawaru and his lawyer attended the pre-hearing discussion on June 4, 2014. As noted above, the pre-hearing arbitrator scheduled this preliminary issues hearing. After the pre-hearing, RBC disclosed the evidence in support of its position that Mr. Katawaru was not injured in an “accident.” There followed a breakdown in the relationship between Mr. Katawaru and his lawyer.
The pre-hearing discussion was resumed on August 8, 2014. Mr. Katawaru again participated. With Mr. Katawaru’s consent, the pre-hearing Arbitrator granted his lawyer’s request for an order removing his firm from the record as Mr. Katawaru’s representative. The pre-hearing arbitrator noted that Mr. Katawaru was aware of the upcoming preliminary issues hearing.
I am satisfied that Mr. Katawaru was given proper notice of the preliminary issues hearing. Mr. Katawaru did not attend the preliminary issues hearing and did not provide any information upon which it could be determined that the hearing should not proceed.
No “accident”
Mr. Katawaru reported to RBC that at the time of the incident he was a passenger in a car driven by Garrick Blaine Leyco. He reported that they were stopped at a red light when a white mid-size car hit them from behind and fled the scene. The white car was not identified. In order to investigate Mr. Leyco’s claim, his insurer retained Mr. Rob Seaton, an expert in collision reconstruction. He prepared a report dated February 8, 2011. Mr. Leyco’s insurer shared the results with RBC. RBC relied upon Mr. Seaton’s report at the hearing.2
Upon inspecting Mr. Leyco’s car, Mr. Seaton concluded that the damage to the rear bumper was inconsistent with the reported collision with another vehicle. Rather, it appeared consistent with a low speed collision with a narrow vertical object, such as a pole.
I accept Mr. Seaton’s opinion. I find that the incident in which Mr. Katawaru claims that he was injured did not occur. I conclude that he was not injured in an “accident” as he claimed.
Misrepresentation and Repayment
Section 47 of the Schedule provides for repayment to an insurer of amounts paid to an insured person as a result of wilful misrepresentation. I find that by reporting that the car in which he was a passenger was hit by another car, Mr. Katawaru wilfully misrepresented the fact that he was injured in an “accident.”
RBC seeks repayments of all benefits it paid to Mr. Katawaru. For the reasons that follow, I find that RBC is entitled to an order for repayment of benefits that were in issue in this arbitration and were paid to Mr. Katawaru. It is not entitled to an order for repayment of benefits that were not in issue in this arbitration or were not paid to Mr. Katawaru.
RBC has not mediated the issue of repayment of benefits. Section 280(1) of the Insurance Act allows either an insurer or an insured person to apply for mediation of any issue in respect of an insured person’s entitlement to accident benefits. Section 281(2) makes mediation a condition precedent to proceeding to arbitration of an issue.
Jurisprudence holds that an arbitrator has jurisdiction to adjudicate a claim for repayment of a benefit, where the insured person has mediated the issue and claims the benefit in arbitration, but the Insurer has not mediated repayment3. I am unaware of any finding that there is jurisdiction to order repayment of a benefit where no mediation of that benefit has occurred.
I raised the issue of jurisdiction at the hearing and sought written submissions from RBC. The submissions I received provided no jurisprudence or argument in support of a finding that mediation is not required. I find no jurisdiction to order repayment of benefits that were not mediated. For this reason, I decline RBC’s request for an order for repayment of income replacement benefits.
In this arbitration, Mr. Katawaru claimed payment of further attendant care benefits, and housekeeping and home maintenance benefits. RBC claims repayment of $2,762.79 paid for attendant care, and $3,209.04 paid for housekeeping and home maintenance. I find that Mr. Katawaru is liable to repay those amounts, totalling $5,791.83.
Section 47 of the Schedule provides for repayment of amounts paid “to the person.” Jurisprudence has interpreted this to mean that an insured person cannot be ordered to repay amounts that were paid to third party service providers.4 There is no evidence that RBC paid to Mr. Katawaru any amount for medical and rehabilitation, or for assessments and examinations. For this reason, and the fact that no mediation of these issues has occurred, RBC’s claim fails in respect of repayment of amounts paid for medical and rehabilitation, and for assessments and examinations.
EXPENSES:
RBC’s claim for expenses was decided based on post-hearing written submissions. I find that RBC is entitled to its expenses of this arbitration, because of its success. This arbitration was also improper and unnecessary because it was based on a wilful misrepresentation.
RBC claims $5,280.22 for legal fees at the appropriate Legal Aid rates. This represents 39.2 hours of work by lawyers and 12.7 hours by law clerks. It includes 3.5 hours of attendance at the preliminary issue hearing that lasted no longer than one hour. The time claimed seems generally excessive, given the issues in dispute and the early termination of the arbitration. I find it reasonable to discount the claim for fees by 25%. Mr. Katawaru is therefore ordered to pay RBC the sum of $3,960.17 for legal fees.
RBC claims $2,978.92 for disbursements. Mr. Rob Seaton was the only witness whose attendance was reasonably necessary for the hearing and he did attend. RBC’s claim for disbursements includes conduct money and process serving fees for witnesses who did not attend the hearing and whose attendance was not reasonably required. There is also duplication in claiming both conduct money and an attendance fee for Mr. Seaton.
I have disallowed the claim for the cost of a transcript of examinations-under-oath. I have no information whether this disbursement was incurred after the arbitration was commenced and in furtherance of the arbitration.
I have awarded the following:
Process server fees $200.00 Rob Seaton fee $500.00 External Printing $223.60 Vehicle Registration Search $37.00 Courier $17.00
Total $977.60
The total amount of expenses that Mr. Katawaru is liable to pay is $4,937.77 ($3,960.17 for fees plus $977.60 for disbursements).
December 22, 2014
Jeffrey Rogers, Arbitrator
Date
Financial Services Commission of Ontario
Neutral Citation: 2014 ONFSCDRS 200 FSCO A12-004855
BETWEEN:
BRIAN KATAWARU Applicant
and
RBC GENERAL INSURANCE COMPANY Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Katawaru was not injured as a result of an “accident” and his application for arbitration is therefore dismissed.
- Mr. Katawaru shall repay to RBC the sum of $2,762.79 paid to him for attendant care, and $3,209.04 paid to him for housekeeping and home maintenance, totalling $5,971.83.
- Mr. Katawaru shall pay to RBC its expenses of the arbitration in the amount of $4,937.77.
December 22, 2014
Jeffrey Rogers, Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- Exhibit 1.
- See Rosa DeCicco and State Farm Mutual Automobile Insurance Company, FSCO P-000277, February 21, 1992.
- See Nassir Hassan Yusuf and Isamili. Ahmed and TD Home and Auto Insurance Company, FSCO A04–001797 and A04–001522, May 31, 2006; Kwaku Addae, and Dominion of Canada General Insurance Company, FSCO A06-000202, November 9, 2007.