Baudanza v. Chartis Insurance Company of Canada, 2015 ONFSCDRS 144

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 144

Appeal P13-00033

OFFICE OF THE DIRECTOR OF ARBITRATIONS

NADIA BAUDANZA

Appellant

and

CHARTIS INSURANCE COMPANY OF CANADA

Respondent

BEFORE:

David Evans

REPRESENTATIVES:

Aliza Karoly for Ms. Baudanza

Claudia Batista for Chartis Insurance Company of Canada

HEARING DATE:

By written submissions received by June 15, 2015

APPEAL EXPENSE ORDER

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

1. No legal expenses are payable with respect to this appeal.

July 7, 2015

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND

This appeal arose out of a pre-hearing where Arbitrator Richards allowed Chartis an additional 20 days to file its Response to Ms. Baudanza’s application for arbitration, despite the length of time that had passed since the application was filed. In doing so, he relied upon Rules 27.2 and 27.3 of the Dispute Resolution Practice Code, Fourth Edition.

On appeal, Ms. Baudanza submitted that the Arbitrator erred in applying those Rules and that Chartis had no standing.

However, in a decision dated April 20, 2015, I found that the Arbitrator did not err in drawing an analogy to R. 27.3 even where no Response had yet been filed and that he had the discretion under R. 34.1 to apply a new timetable for compliance at the pre-hearing. I also considered two lines of arbitral case law regarding standing and found that Chartis did not lose its standing by failing to file a Response. Rather, the insurer named in an Application for Arbitration has standing to participate in the arbitration process until an arbitrator orders otherwise.

Chartis now seeks its expenses of the appeal in the amount of $1,582.

II. ANALYSIS

Chartis submits that the only relevant expense criterion under Rule 75.2 is (a), “each party’s degree of success in the outcome of the proceeding.” Therefore, it is entitled to its expenses.

Ms. Buadanza submits that the relevant criteria are (c), “whether novel issues are raised in the proceeding,” and (d), “the conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding...”

Ms. Baudanza seeks an order that expenses not be awarded to either party.

The success of Chartis on appeal is an important criterion. However, I find the criteria of delay and novelty merit awarding no appeal expenses.

With respect to the insurer’s delay, nearly a year passed between the application for arbitration and the response.

Furthermore, the issue was novel.

I found that old case law dealing with an insurer’s standing was no longer relevant where, as now, insurers are assessed their fees shortly after the application for arbitration is filed. There were conflicting decisions on this issue that had not been dealt with on appeal. The issue was therefore worthy of consideration on appeal because of those conflicting decisions.

Accordingly, I find costs should be awarded to neither party in this case.

July 7, 2015

David Evans Director’s Delegate

Date