Veeramathy Ponniah v. State Farm Mutual Automobile Insurance Company, 2016 ONFSCDRS 26

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 26

FSCO A14-006289

BETWEEN:

VEERAMATHY PONNIAH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before:

Arbitrator Patrick N. Bowles

Heard:

By telephone conference on September 10, 2015 and October 26, 2015

Appearances:

Mrs. Veeramathy Ponniah did not participate

Mr. Benjamin Flanagan participated for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mrs. Veeramathy Ponniah, was injured in a motor vehicle accident on October 29, 2012, and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mrs. Ponniah, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Motion are:

Should Mrs. Veeramathy Ponniah’s Application for Arbitration be dismissed?
Is State Farm entitled to its expenses?

Result:

Mrs. Veeramathy Ponniah’s Application for Arbitration is dismissed
State Farm is entitled to its expenses in the amount of $1,761.56 plus HST, payable forthwith

EVIDENCE AND ANALYSIS:

Background

Counsel for State Farm, Mr. Ben Flanagan, has brought two Motions under the Dispute Resolution Practice Code (“Code”) requesting:

Dismissal of proceeding without Hearing pursuant to Rule 68;
Award of expenses pursuant to Rule 75.

The Applicant filed an Application for Arbitration listing the following issues: Income Replacement Benefits (IRBs); Attendant Care Benefits and Cost of Examinations.

An in-person Pre-Hearing conference was scheduled for June 15, 2015. Three days before the commencement of the session, I was advised on June 12, 2015, by Mr. Glowinsky’s office “that due to unforeseen circumstances and difficulty in contacting our client …. the parties have agreed to a mutual resumption of the Arbitration Pre-Hearing.”

A new date of June 30, 2015 was set but it was to proceed by telephone conference. On the day before I was asked for another postponement which was refused. The conference commenced as scheduled on June 30, 2015. We were advised that Mr. Glowinsky wished to get off the record.

An Order was subsequently provided removing Mr. Glowinsky as Mrs. Ponniah’s legal representative. From the submission made, it appears that the relationship has broken down and Mr. Glowinsky has been unable to contact or communicate with his client.

I wrote to Mrs. Ponniah on July 7, 2015, enclosing a copy of the Order and at the same time, providing her with a Notice of Motion to have her Application for Arbitration dismissed as well as an Order for State Farm’s expenses.

The Hearing of Mr. Flanagan’s Motion proceeded as scheduled on September 10, 2015 by teleconference. Mrs. Ponniah did not participate. At a later date, Mr. Flanagan presented his Bill of Costs.

Rule 68 – Dismissal of proceeding without Hearing

Before an Arbitrator can dismiss an Application for Arbitration, Rule 68.2 provides that the Arbitrator shall deliver written notice to all parties of the intention to dismiss. I believe that the Applicant has been duly served and I have received no written submissions or received any communication of any kind from Mrs. Ponniah.

I can now proceed to consider the provisions in Rule 68.1 “where an adjudicator may dismiss a proceeding without a hearing where the proceeding is frivolous, vexatious or is commenced in bad faith”.

There is no evidence to suggest Mrs. Ponniah made her application in bad faith nor was it frivolous at the time of the Application for Arbitration. The application for benefits went through the mediation stage and I have to assume that counsel at the time filed out the Application for Arbitration in the belief that Mrs. Ponniah had legitimate claims. But an application can become frivolous if there is no attempt to cooperate with the proceedings or make any effort to communicate with her counsel of record. The Application for Arbitration has certainly now become both frivolous and vexatious in nature in the sense it has become annoying and troublesome to the process in general and to State Farm in particular. There are no grounds to allow the matter to proceed where it has become obvious the Applicant has taken no interest in proceeding with her claims.

Decision

As provided for in Rule 68, Mrs. Ponniah’s Application for Arbitration is dismissed.

EXPENSES:

Rule 75 – Award of Expenses

Mr. Flanagan has requested I consider the following calculation in the assessment of expenses at the minimum Legal Aid Rate:

J. Schrieder 3 hours partner (year of call 2000) @ $129.93/h = $389.79

B. Flanagan 25 hours associate (year of call 2012) @ $103.94/h = $2,598.50

M. Davis 13 hours law clerk @ $30.82/h = $400.66

Total hours: 41 hours = $3,388.95

By applying the firm’s actual rate as set out in Mr. Flanagan’s submissions, the following is Mr. Flanagan’s submission:

J. Schrieder 3 hours partner (year of call 2000) @ $300/h = $900.00

B. Flanagan 25 hours associate (year of call 2012) @ $150/h = $3,750.00

M. Davis 13 hours law clerk @ $110/h = $1,430.00

Total hours: 41 hours = $6,080.00

Meeting the requirements as set out in Rule 75

I may award expenses if I am satisfied that reward is justified having regard to a set of criteria, and only the criteria, set out in the Rule. The criteria set out in Section 75.2(e) is germane to this Motion. The Rule states the adjudicator will consider … “whether any aspect of the proceeding was improper, vexatious, or unnecessary”. As I have already determined that the conduct of the Applicant with respect to her application is now vexatious, I can consider Mr. Flanagan’s request for expenses.

Two issues remain to be considered: The amount of hours claimed reasonable? And what is the hourly rate to be applied to each of the three categories?

Mr. Flanagan has not provided any specifics as to how the hours were calculated and the work undertaken to justify the hours claimed. He did explain that the file when received by his office comprised of about 400 pages of material. Time was initially spent in reviewing the file and preparing an opinion for his client. As for the number of issues, only three are recorded namely: IRBs, Attendant Care Benefits and Cost of Examination. There were a number of failed attempts to have the Applicant turn up for scheduled Pre-Hearing sessions which added to the time spent on the file. Added to this, is counsel’s time in preparing the Motion to dismiss and preparing his bill of cost.

However, the file was in the possession of his office some eight months subsequent to the filing of its response the Application for Arbitration. This a relatively short time. Additionally, not a great deal transpired by way of correspondence and activity between the parties other than prepare for the Pre-Hearing sessions which in reality produced little results.

Accordingly, I have a difficult time justifying the number of hours generated, 41 hours, on this file.

As for the hourly rates to be applied, Rule 78 provides some guidance. The maximum amount that may be awarded for legal fees is established by the Legal Aid Services Act, 1998. I have some discretion in awarding a higher rate but I have to consider the results obtained, the complexity of the matter and any other relevant factor that would warrant an increased fee. I can find no justification for increasing the fee and departing from the tariff, given the stage the file was at the time of this dismissal and the number of issues. As I mentioned above, Mr. Flanagan provided no time docks establishing the activity justifying the accumulation of 41 fee hours.

There are no disbursements.

Decision

The following is the expense award:

J. Schrieder 2 hours @ $129.93/h = $259.86

B. Flanagan 10 hours @ $103.94/h = $1,039.40

M. Davis 15 hours @ $30.82/h = $462.30

Total Hours: 27 hours = $1,761.56 plus HST

January 18, 2016

Patrick N. Bowles

Arbitrator

Date