Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 189

Appeal P14-00021A, P14-00021C and P14-00041V

MOTOR VEHICLE ACCIDENT CLAIMS FUND Appellant/Respondent on Cross-Appeal and Variation

and

COLIN VELEY Respondent/Appellant on Cross-Appeal and Variation

BEFORE: David Evans

REPRESENTATIVES: Jeffrey Neinstein for Mr. Veley Robert W. Kerkmann for the Motor Vehicle Accident Claims Fund

HEARING DATE: On the record, by submissions received by July 14, 2015

APPEAL EXPENSES ORDER

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

Colin Veley shall pay the Motor Vehicle Accident Claims Fund its legal expenses of the appeal proceedings herein, fixed at the amount of $7,500.00, inclusive of disbursements and HST.

September 16, 2015

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

In a decision dated April 20, 2015, I dealt with appeals of the decision of Arbitrator Ahlfeld dated May 5, 2014. First, the Motor Vehicle Accident Claims Fund appealed her order that the Fund pay Mr. Veley a fixed amount of attendant care benefits (ACBs) under s. 19 of the SABS‑‍2010¹ from June 2011 to December 2012. Mr. Veley cross-appealed the Arbitrator’s refusal to order those benefits prior to June 2011. Both parties appealed the Arbitrator’s orders regarding allowable deductions for collateral benefits. Finally, Mr. Veley sought a variation order extending the ACBs past December 2012.

I allowed the Fund’s appeal but disallowed Mr. Veley’s cross-appeal and variation application.

II. BACKGROUND AND ANALYSIS

Mr. Veley was in two accidents on December 28, 2010 and June 30, 2011 which, combined, led to a catastrophic impairment. He did immediately claim accident benefits for the 2011 accident from AXA Insurance, which paid the maximum $6000 in ACBs.²

Only in January 2012 did Mr. Veley advise the Fund of his claim for accident benefits in relation to the 2010 accident. In December 2012, AXA settled his 2011 accident benefits claim.

The Arbitrator found no benefits were owed by the Fund for the period prior to the 2011 accident. For the period afterwards, she assessed Mr. Veley’s attendant care needs at $9,432.25 per month and found that he was entitled to the maximum $6000 per month (subject to deduction for the AXA payments), “notwithstanding that his actual incurred expenses was less.”

The Arbitrator allowed deductions for collateral benefits up to the December 2012 settlement with AXA but not thereafter.

The Fund appealed the order that it had to pay benefits that were not incurred and that it could not deduct collateral benefits after December 2012. Mr. Veley appealed the order that he is not entitled to benefits from the first accident and that deductions for collateral benefits were allowed at all.

Finally, Mr. Veley brought a variation application because the Arbitrator’s order only deals with benefits up to December 2012.

I allowed the Fund’s appeal since, subject to the exception in s. 3(8) of the SABS, only incurred expenses need be paid under the benefit. I therefore disallowed Mr. Veley’s appeal that he was entitled to the maximum ACBs from the first accident. I also found that the Fund is entitled to a deduction of collateral benefits throughout. However, the determination of the appropriate monthly deduction after 2012 for the global settlement had to be returned to arbitration. Finally, I disallowed the variation application.

Both parties now seek their expenses. I clearly stated in my decision that I would only be dealing with appeal expenses. The Fund set out its appeal expenses claim. However, in response, Mr. Veley simply claimed a global amount for both arbitration and appeal expenses, notwithstanding my order. I will not make an order for arbitration expenses, since the Fund only made submissions with respect to appeal expenses.

Both parties agreed that the expense hearing be heard on the record pursuant to s 283(4) of the Insurance Act.

The first criterion listed in the Expense Regulation, s. 12 of O. Reg. 664, R.R.O. 1990 is “Each party’s degree of success in the outcome of the proceeding.” The Fund was successful in its appeal, and successfully resisted Mr. Veley’s cross-appeal and variation.

Mr. Veley submits that the initial Arbitration decision was so flawed that he had no choice but to appeal. However, as he notes himself, the Fund had to bring the appeal for the same reason, so that point does not favour either side.

Mr. Veley submits that his position regarding the application of s. 3(8) of the SABS was a novel argument. He is thus relying on criterion 3, “Whether novel issues are raised in the proceeding.” Subsection 3(8) provides the exception for incurred expenses, allowing them to be deemed incurred where “a Court or arbitrator finds that an expense was not incurred because the insurer unreasonably withheld or delayed payment of a benefit in respect of the expense.” However, I found that Mr. Veley’s submission that the “unreasonably” only applies to “withheld” “illogical, ungrammatical and impractical.” This issue does not count as “novel.”

Mr. Veley submits that any expense order against him would have a significant adverse consequence on his health. I find that this, to the extent it is relevant, goes more to the amount of the order than whether the Fund is entitled to an order of expenses.

I find that, based on the relevant criteria, the Fund is entitled to its expenses due to its success.

The total amount claimed by the Fund for its expenses is $16,392 for legal fees and $231 for disbursements (in-house photocopying). Bains and RBC General Insurance Company, (FSCO P09-00005, September 8, 2010), in reviewing twenty appeal expense awards, found that the average appeals expense award was $2,812.91 where expenses were awarded to insurers. The amount claimed here is considerably higher. The Fund submits that the proceeding involved multiple issues and arguments that it had to address. Further, it submits, the issues relating to the AXA settlement and deduction were not fully addressed at arbitration because Mr. Veley refused or failed to provide the settlement documents in the arbitration. It was only on appeal that Mr. Veley provided the relevant information, so the Fund submits it had to address the new information and make submissions about them.

Furthermore, Mr. Veley had sufficient resources to afford counsel, so he had access to the justice system, and it was his own counsel who took positions necessitating considerable responses by the Fund.

That being said, as I recently noted in Allstate Insurance Company and T.S., (FSCO P11-00032, July 17, 2015), a line-by-line assessment of the expenses claimed is not appropriate. Rather, a global assessment of reasonable expenses should be made. I find that the Fund is entitled to more than the average amount, considering it had to deal with two appeals and a variation application, I find a reasonable global assessment for appeal expenses is $7,500, inclusive of disbursements and HST.