Mooney v. Wawanesa Mutual Insurance Company, 2017 ONFSCDRS 180

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 180

FSCO A13-008593

BETWEEN:

CAROLYN MOONEY

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Arbitrator Marvin J. Huberman

Heard:

In person at ADR Chambers on May 17, 2017, and by written submissions completed on June 2, 2017

Appearances:

Mr. Leonard H. Kunka, Lawyer, for Ms. Carolyn Mooney

Ms. Katherine E. Kolnhofer, Lawyer, and Ms. Brenda Cuneo, Lawyer, for Wawanesa Mutual Insurance Company

Issues:

The Applicant, Ms. Carolyn Mooney, was injured in a motor vehicle accident on November 14, 2007. In a decision, dated February 26, 2016, I dealt with her claims for statutory accidents benefits under the Schedule,¹ and made the following Arbitration Order under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as amended:

Ms. Mooney is not entitled to receive a non-earner benefit of $320.00 per week from April 1, 2011, to date and ongoing, pursuant to section 12 of the 1996 Schedule.
Ms. Mooney is entitled to attendant care benefits from February 15, 2008, to date and ongoing, less amounts paid by Wawanesa, pursuant to section 16 of the 1996 Schedule, as follows:

(a) February 15, 2008 to April 15, 2008 at $3,768.43/month;

(b) April 16, 2008 to May 20, 2010 at $3,620.94/month;

(d) January 28, 2011 to April 23, 2012 at $2,737.87/month;

(e) April 24, 2012 to February 25, 2013 at $454.37/month;

(f) February 26, 2013 to July 13, 2013 at $423.10/month; and

(g) July 13, 2013 to date and ongoing at $607.87/month.

Ms. Mooney is entitled to housekeeping and home maintenance benefits in the amount of:

(a) $100.00 per week from February 15, 2008 to February 26, 2013, and

(b) $92.00 per week from February 27, 2013 to date and ongoing, less amounts paid by Wawanesa, pursuant to section 22 of the 1996 Schedule.

Ms. Mooney is entitled to payment for the following costs of examinations, pursuant to sections 24 and 42.1 of the 1996 Schedule and subsection 25(5) of the 2010 Schedule:

(a) $5,298.89 for a section 24 Attendant Care Report by Ms. Robin Kadanoff, Occupational Therapist, dated June 25, 2010;

(b) $2,000.00 for a section 25 Attendant Care Report by Ms. Robin Kadanoff, Occupational Therapist, dated May 28, 2012;

(c) $1,969.81 for a section 25 Attendant Care Report by Ms. Robin Kadanoff, Occupational Therapist, dated March 1, 2013; and

(d) $2,000.00 for a Rebuttal to an Insurer Examination provided by Dr. Jeremy Frank, Psychologist, dated September 15, 2011.

Ms. Mooney is not entitled to receive the following rehabilitation benefits, pursuant to section 15 of the 1996 Schedule:

(a) $1,106.72 for public transit costs to school incurred from January 8, 2013 to December 16, 2013;

(b) $125.00 for the costs of rewriting her driving test; and

Ms. Mooney is entitled to interest for the overdue payment of benefits awarded, pursuant to the 1996 Schedule and the 2010 Schedule.
Should the parties not agree on entitlement to or the amount of expenses, either party may make an appointment for me to determine the matter in accordance with Rules 75-79 of the Dispute Resolution Practice Code.

The parties were unable to resolve the issue of expenses and an appointment was made for me to determine the matter in accordance with Rules 75-79 of the Dispute Resolution Practice Code (the “DRPC”).

The issues in this Expense Hearing are:

Is either party entitled to expenses of the Arbitration and, if so, in what amount?
Is Ms. Mooney entitled to interest for the overdue payment of past attendant care benefits and housekeeping and home maintenance benefits awarded, pursuant to the 1996 Schedule?

Result:

The Applicant is entitled to expenses incurred in respect of this Arbitration, including the Hearing on Expenses, in the total amount of $67,688.74, representing $31,968.00 for legal fees plus $4,155.84 for HST thereon, and $27,933.54 for disbursements plus $3,631.36 for HST thereon.
The Applicant is not entitled to interest for the overdue payment of past attendant care benefits and housekeeping and home maintenance benefits awarded, pursuant to the 1996 Schedule.

EVIDENCE AND ANALYSIS:

positions of the parties on expenses

The Applicant’s Submissions

The Applicant seeks her entire costs of the Arbitration on a solicitor/client scale under section 12 of Regulation 664, R.R.O. 1990, made under the Insurance Act (the “Expense Regulation”).

Alternatively, the Applicant seeks enhanced costs on a solicitor/client scale for Wawanesa’s failure to accept the Applicant’s Offer to Settle in a similar manner to Rule 49.10 of the Rules of Civil Procedure, under Rule 75.2 of the DRPC. In the further alternative, the Applicant seeks her full expenses incurred for this Arbitration by way of a Special Award in the amount equivalent to the difference between her expenses assessed for the Arbitration and her full solicitor/client fees as “other goods and services that the insured person requires”, pursuant to section 15(5)(l) of the Schedule.

Further alternatively, the Applicant submits that, at a minimum, she should be awarded the maximum hourly rate (pursuant to Rule 78.1 of the DRPC) of $150.00 per hour for each of the two counsel appearing for her, based on the complexity of the case, the fact that all issues were hard-fought at the Arbitration, and significant written submissions were filed, all of which required experienced legal counsel.

Wawanesa’s Position

Wawanesa requests an Order that each party bear their own costs; alternatively, that Wawanesa should be awarded expenses of the Arbitration.

Wawanesa submits that the Applicant’s position on costs is unreasonable, far overreaching, and untenable in law. There is no precedent to support the full indemnity expense award that the Applicant is seeking. It submits the Applicant’s maximum entitlement to costs is prescribed by Rule 78.1 of the DRPC and the Expense Regulation.

The Applicant’s expense submission goes well above the entitlement as per legislation and established case law, which resulted in the inability to resolve the issue of costs.

AUTHORITY TO AWARD EXPENSES

Subsection 282(11) of the Insurance Act provides that:

The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Rule 75.1 of the DRPC provides that:

An adjudicator may award expenses to a party if the adjudicator is satisfied that the award is justified having regard to the criteria set out in Rule 75.2. The items and amounts which may be awarded are in Rule 78 and the Schedule to the Expense Regulation found in Section F of the Code.

Rule 75.2 of the DRPC, which sets out the criteria to be considered in awarding expenses, states the following:

The adjudicator will consider only the criteria referred to in the Expense Regulation found in Section F of the Code. These criteria are:

a. Each party’s degree of success in the outcome of the proceeding;

b. Any written offers to settle made in accordance with Rule 76;

c. Whether novel issues are raised in the proceedings;

d. The conduct of a party or party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders;

e. Whether any aspect of the proceeding was improper, vexatious or unnecessary;

f. Whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation; and

g. Whether the insured person refused or failed to submit to an examination as required under section 44 of Ontario Regulation 34/10 (Statutory Accident Benefits – Effective September 1, 2010), made under the Act, or refused or failed to provide any material required to be provided under subsection 44(9) of that regulation.

I find that the pertinent criteria for the award of expenses in this case are: (a) Each party’s degree of success in the outcome of the proceeding, (b) Any written offers to settle made in accordance with Rule 76, (c) Whether novel issues are raised in the proceeding, and (d) Whether the conduct of a party or party’s representative tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.

Each Party’s Degree of Success

The success of the parties in the present case was mixed. That stated, I find that the Applicant achieved a sufficient degree of success in the outcome of the proceeding to be entitled to expenses. While the Applicant was not entitled to receive a non-earner benefit or the medical and rehabilitation benefits claimed, she was awarded attendant care benefits, housekeeping and home maintenance benefits, the costs of examinations, and interest. The Applicant was successful on issues of considerable importance to this proceeding. The overall amount awarded to the Applicant for the issues upon which she was successful was greater than the monetary value of the issues on which she did not succeed. I consider this a success for the Applicant.²

Written Offers to Settle

The Parties each made an Offer to Settle prior to the Hearing in accordance with Rule 76 of the DRPC.

In accordance with subsections 12(3) and (4) of the Expense Regulation, at the request of the Parties, I have considered the terms of the Offers, the timing of the Offers, the responses to the Offers, and the result of the proceeding, for the purposes of awarding expenses.

I note that the amount I awarded to the Applicant far exceeded both the Applicant’s and the Insurer’s Offers to Settle, inclusive of interest. This supports the Applicant’s entitlement to reasonable expenses of the Arbitration, but not on an escalated scale or with the costs consequences of Rule 49.10 of the Rules of Civil Procedure.

I am of the view that Rule 49.10 of the Rules of Civil Procedure, which details costs consequences of a party’s failure to accept an opposing party’s Offer to Settle when the award subsequently exceeded the Offer to Settle, has no application to this Arbitration. There is no authority to support the contention that Rule 49 of the Rules of Civil Procedure applies to Arbitration proceedings before this Commission. Indeed, the Applicant cited none.

It is clear that the basis for making an award of expenses in an Arbitration proceedings before this Commission stems from subsection 282(11) of the Insurance Act.

The relevant Regulation in effect is Reg. 664, R.R.O. 1990, section 12 (the Expense Regulation), made under the Insurance Act, which together with Rule 75 of the DRPC and Schedule F to the DRPC directs an Arbitrator as to how to award expenses in an Arbitration proceeding.

The Offers to Settle made by the parties in the present case – viewed particularly in the light of its result – is one of the criteria in Rule 75.2 of the DRPC that I have considered in awarding expenses to the Applicant.

Whether Novel Issues are Raised in the Proceeding

The Applicant’s claim regarding the non-earner benefit – the issue on which the Applicant did not succeed – was that without the assistance from numerous rehabilitation professionals, the Applicant would be incapable of performing her normal daily activities.

Counsel for the Applicant submits that there are very few arbitral or judicial decisions which have specifically addressed whether an Applicant would qualify for non-earner benefits where the Applicant continues to require ongoing support of rehabilitation professionals in order to carry out the activities of daily living, and that because of the limited case law around this issue, it was appropriate to proceed to Arbitration, particularly given the Insurer was making no offer regarding settlement of the non-earner benefit.

Counsel for Wawanesa submits that the issue of non-earner benefits was in no way novel; numerous decisions with respect to that benefit that have been heard before the Commission, and the Applicant was aware of the stringent disability test that has been applied by Arbitrators and courts alike, first articulated by the Court of Appeal in Heath v. Economical.³ With full knowledge of these risks and the well-established disability test, the Applicant proceeded to Arbitration.

I agree with the submissions of Wawanesa. In my view, the issue of non-earner benefits in the present case was not novel in the legally-significant way that would justify no expenses consequences against the Applicant who unsuccessfully advanced the issue.

For a successful party to be denied its expenses, it is not enough that the issue is unprecedented or that an issue has not been decided before.⁴ The legally-significant novelty of a legal issue is found in the circumstance that the existing case law is inadequate to resolve the issue, and there would be no proper reason for the party advancing the issue to expect to fail.⁵

I conclude that the existing case law was adequate to resolve the issue of non-earner benefits, and that there were a number of evidentiary reasons for the Applicant to anticipate the risk of failure.

The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.

The Applicant submits that Wawanesa could have substantially shortened the proceeding, or avoided it entirely, by settling one or more of the issues prior to the Arbitration, based on the Applicant’s Offer to Settle.

Furthermore, according to the Applicant, Wawanesa’s submissions ignored the fact that the Applicant’s Offer to Settle was severable, and it was open to Wawanesa to have resolved the issues of past attendant care and housekeeping and home maintenance, as well as the issues of the continuing need for attendant care and housekeeping and home maintenance, without requiring the Arbitration to proceed on those issues.

I agree with these submissions of the Applicant.

Wawanesa contends that the Applicant’s conduct hindered the proceeding by: (1) failing to deliver productions to the Insurer in a timely fashion, which is a consideration when determining expenses awards;⁶ (2) forcing Wawanesa to incur unnecessary expenses of repeated follow-ups, and requiring it to summons a variety of witnesses on the first day of the Arbitration Hearing, on account of requested productions not being provided by the commencement of the Arbitration; (3) failing to produce pertinent documents and obtain them even for the sake of the Applicant’s own witnesses, which was unreasonable and tantamount to obstruction and hindering; (4) consuming a significant portion of the Arbitration with avoidable issues, e.g., the majority of the first day of the Hearing involved a preliminary issue regarding the Applicant’s late filing of Dr. Voorneveld’s expert report, dated June 27, 2011, which the Insurer was ultimately successful on; (5) consuming more time on February 26, 2015, when counsel for the Applicant attempted to rely on clinical notes and records of Dr. Pearl that had been provided to the Insurer for the first time in the Applicant’s Arbitration Briefs; (6) consuming a significant portion of the Hearing on March 4, 2015 with counsel for the Applicant attempting to have Dr. Frank qualified as an expert, when the Applicant’s Witness List clearly had Dr. Frank listed as a “treating psychologist”, and the Insurer successfully objected; (7) counsel for the Applicant further attempted to have Dr. Tuff disqualified as an expert to opine on the issue of non-earner benefits, and was unsuccessful; (8) further time was wasted when the Applicant attempted to introduce the excluded report of Dr. Voorneveld via Dr. Frank both on March 14 and 15; and (9) counsel for the Applicant also unnecessarily lengthened and prolonged the written submissions portion of the Arbitration Hearing by including fresh material never adduced in person, which had to be refuted by the Insurer and was ultimately removed by the Applicant, resulting in additional time to be spent to deal with this issue.

I accept this argument.

In my view, both parties engaged in conduct that tended to prolong, obstruct or hinder the Arbitration proceeding.

Solicitor/Client Scale

Counsel for the Applicant submits that taking the pertinent criteria in Rule 75.2 of the DRPC into consideration, together with the overall success of the Applicant and the fact that the award significantly exceeded the Applicant’s Offer to Settle, I should exercise my discretion to award the Applicant her entire costs of the Arbitration proceeding on a solicitor/client scale.

Despite the able and creative submissions of counsel for the Applicant, I am unable to accept that argument. Rather, I agree with the submissions of counsel for Wawanesa that this arbitral tribunal has no discretion to award the Applicant her entire costs of the Arbitration proceeding on a solicitor/client scale.

In my view, properly construed, and “read in their entire context and in their grammatical and ordinary sense”,⁷ the words in subsection 282(11) of the Insurance Act mean that an Arbitrator has a discretion to award, to the insured person or Insurer, all or part of expenses that are prescribed in the Regulations, to the maximum set out therein.

Rule 75.1 of the DRPC provides, in relevant part, that “the items and amounts which may be awarded are found in Rule 78 and the Schedule to the Expense Regulation found in Section F of the Code”.

Rule 78.1 of the DRPC provides that the maximum amount that may be awarded to an insured person or an Insurer for legal fees is an amount calculated using the hourly rates established under the Legal Aid Services Act, 1998, with a discretion conferred on an Adjudicator to increase the hourly rate up to $150.00 “where an adjudicator is satisfied that a higher amount for legal fees is justified.”

Furthermore, I reject the Applicant’s submissions that Waldock and State Farm⁸ stands as authority for the proposition that an Arbitrator has discretion to award to an insured person his or her entire costs of the Arbitration on a solicitor/client scale under section 12 of Regulation 664, R.S.O. 1990, made under the Insurance Act (the Expense Regulation).

To the contrary, in Waldock, Arbitrator Henry explicitly held, in paragraphs 40 and 41 of his decision, that:

40Subsection 282(11) of the Act sets out the criteria for determining the dispute resolution expenses. State Farm did not raise any persuasive objections to any of the amounts claimed for the legal expenses sought by Mr. Waldock. Further, I find the amounts claimed by Mr. Waldock for legal expenses are reasonable and conform to the criteria set out in the Regulation.

41I find that as Mr. Waldock has been entirely successful in this matter, he is entitled to re-imbursement of his Bill of Costs and his disbursements.

Accordingly, the Applicant’s request for her entire costs of the Arbitration based on a solicitor/client scale under section 12 of the Expense Regulation is denied.

Special Award

I also reject the Applicant’s submission that she should be awarded full expenses incurred for this Arbitration by way of a Special Award in the amount equivalent to the difference between her expenses assessed for the Arbitration and her full solicitor/client fees as “other goods and services that the insured person requires”, pursuant to section 15(5)(l) of the Schedule, for several reasons.

First and foremost, an award of expenses on a solicitor/client scale, as requested by the Applicant, directly conflicts with subsection 282(11) of the Insurance Act and Rules 75.1 and 78.1 of the DRPC, which prescribe the items and amounts which an Arbitrator may award to an insured person or an Insurer in an Arbitration proceeding.

Second, the decision of the Ontario of Justice (General Division) in Guardian v. Golic,⁹ relied upon by the Applicant, is distinguishable from the present case.

In Golic, Sharpe, J., in paragraphs 4 and 17 of his Endorsement, applied section 40 of the Statutory Accidents Benefits Schedule (Ontario Regulation 776/93) to “the unusual circumstances of this case and the difficulties it presented” in making his costs order.

In the present case, both the facts and the applicable law are materially different from that in Golic. Accordingly, I conclude that a similar outcome to that arrived in Golic is not appropriate in the present case.

Third, the Applicant has not met the statutory test for a Special Award in subsection 282(10) of the Insurance Act, which requires “that the arbitrator find that an insurer has unreasonably withheld or delayed payments”. Based on the evidence adduced in this Arbitration proceeding, I find that the Applicant has not proved to my satisfaction that Wawanesa unreasonably withheld or delayed payments within the meaning of subsection 282(10) of the Insurance Act.¹⁰

Quantum of Expenses

The overriding consideration in fixing legal expenses is reasonableness.¹¹ A line–by–line assessment of the expenses claimed is not required.¹² The task involves taking a pragmatic, broad–strokes approach with a view to fixing an amount that is reasonable. This may involve applying a ratio of Pre-Hearing preparation time to Hearing time, in the range of 1:1 to 4:1.¹³

In Reid and ING,¹⁴ Arbitrator Killoran held with respect to Arbitration legal expenses that:

The relationship between insurer and insured is a contractual one. The insured is entitled to access the dispute resolution process at FSCO as a result of that contract. The Insurance Act and its regulations must be interpreted in such a way as to uphold the protective and remedial nature of the legislation from which it flows.

In Halim and Security National Insurance Co./Monnex Insurance Mgmt. Inc., Director’s Delegate Blackman held:¹⁵

I find that these expense criteria do not exist in a vacuum segregated from the overall legislative intent. Rather, the criteria are defined by, and help define the broader, overarching legislative intentions, including consumer protection, as set out by the Supreme Court of Canada in Smith v. Co-Operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, which encompasses a fair and reasonable measure of access to justice.

This Arbitration proceeding involved 9.25 Hearing days and the testimony of numerous expert and lay witnesses. At 6 hours per day multiplied by 9.25 Hearing days, the total Hearing time was 55.5 hours. In her Bill of Costs, the Applicant claims 578.90 hours for fees. At the Legal Aid-adjusted rate, the fees total $61,482.15, exclusive of HST and disbursements. At the enhanced rate of $150.00 per hour, the fees total $85,912.00, exclusive of HST and disbursements.

Wawanesa submits that the amount being claimed by the Applicant is excessive and unreasonable, and goes well above her entitlement per legislation and established case law.

I agree with this submission of Wawanesa.

Based on the evidence before me, I find that a reasonable number of total hours for all legal services in respect of this Arbitration proceeding, including the Hearing on Expenses, but excluding Hearing time, is 157.62 hours. Based on 55.5 hours of Hearing time and 157.62 hours of preparation time, the ratio of preparation time to Hearing time is 2.84:1 (i.e., 157.62/55.5).

When added together, the Hearing time of 55.5 hours and the assessed hours for legal services of 157.62 hours total 213.12 hours. At the hourly rate of $150.00, which amount I find is justified for legal fees to the Applicant in the present circumstances under Rule 78.1 of the DRPC, this totals $31,968.00 for legal fees (213.12 hours x $150.00/hr), exclusive of HST and disbursements, which I award to the Applicant.

Disbursements

The Applicant claimed disbursements in the amount of $45,671.09, exclusive of HST. Wawanesa disputes as unreasonable and excessive several items claimed as disbursements.

Based on the evidence before me, and having carefully considered the oral and written submissions of the Parties, I find that the disbursements claimed by the Applicant are of types and in amounts permitted under the Expense Regulation, and they are reasonable in the circumstances of this proceeding and in line with other expense awards, save and except for the following disbursements claimed by the Applicant which are disallowed or reduced, for the reasons stated below:

a) Medical Records (Dr. Jeremey Frank) - $90.00 - disallowed because the Insurer had to summons records for the Arbitration Hearing. The records were ultimately never produced;

b) Updated Medical Records (Dr. Jeremey Frank) - $350.00 - disallowed because the Insurer had to summons records for the Arbitration Hearing. The records were ultimately never produced;

c) School Records (Richmond Hill High School) - $61.05 - disallowed because the Insurer never received these records despite repeated requests;

d) School Records (George Brown College) - $35.00 - disallowed because the Insurer never received these records. The Insurer had to summons George Brown for production of the records, which were in the Applicant’s possession since 2014;

e) Witness preparation/attendance fees (Michelle Cohen & Associates) - $5,045.70 - disallowed because:

i. Michelle Killick - $1,003.20 - Ms. Killick testified as a treatment provider not as an expert witness. Conduct money for her attendance was paid in accordance with subsection 5(2) of the DRPC. No further amounts are payable as per the legislation;

ii. Jennifer Mogilevich - $2,310.00 - Ms. Mogilevich did not testify at the Arbitration. The Insurer did not request that Ms. Mogilevich be made available for cross-examination. The Applicant did not call Ms. Mogilevich as a witness nor were any of her reports filed. Therefore, any expenses for Arbitration preparation of Ms. Mogilevich are not payable as per subsection 5(4) of the DRPC. Further, the Insurer had to summons her records for the Arbitration Hearing, which were not produced until the commencement of the Arbitration on February 23, 2015;

iii. Johanna Bouter - $1,237.50 - Ms. Bouter did not testify at the Arbitration. Therefore, any expenses for Arbitration preparation by Ms. Bouter are not payable as per subsection 5(4) of the DRPC. Further, the Insurer had to summons her records for the Arbitration Hearing, which were not produced until the commencement of the Arbitration on February 23, 2015;

iv. Stephanie Zawalicz - $495.00 - Ms. Zawalicz did not testify at the Arbitration. Therefore, any expenses for Arbitration preparation of Ms. Zawalicz are not payable as per subsection 5(4) of the DRPC. Further, the Insurer had to summons her records for the Arbitration Hearing, which were not produced until the commencement of the Arbitration on February 23, 2015.

f) Witness preparation/attendance fees (Robin Kadanoff) - $2,850.25 for review, travel/parking, Arbitration attendance - partially payable at $1,500.00 (5 hours x $200.00/hr for Arbitration attendance and $500.00 for Arbitration preparation) in accordance with subsections 5(3) and (4) of the DRPC;

g) Witness preparation/attendance fees (Kim Wilson-Wiles) - $1,918.28 for service fee - disallowed because Ms. Wilson-Wiles testified as a treatment provider, not as an expert witness. Conduct money for her attendance was paid in accordance with subsection 5(2) of the DRPC, and was claimed separately by the Applicant. No further amounts are payable as per the DRPC;

h) Witness preparation/attendance fees (Nancy Lok) - $1,757.91 for service fee - disallowed because Ms. Lok testified as a treatment provider, not as an expert witness. Conduct money for her attendance was paid in accordance with subsection 5(2) of the DRPC, and was claimed separately by the Applicant. No further amounts are payable as per the DRPC;

i) Witness preparation/attendance fee (Lawlor Therapy – Kirsten Handleycrane) - $75.00 for communication - Arbitration - disallowed because Ms. Handleycrane testified as a treatment provider, not as an expert witness. Conduct money for her attendance was paid in accordance with subsection 5(2) of the DRPC, and was claimed separately by the Applicant. No further amounts are payable under the DRPC;

j) Witness preparation/attendance fee (Dr. Jeremey Frank) - $7,846.45 for 2 days - partially payable at $2,550.00 (9 hours at $200.00/hr for the Arbitration and $750.00 for preparation) because the Insurer had to summons the records for the Arbitration Hearing. The records were ultimately never produced. Dr. Frank testified at the Arbitration Hearing as an expert witness for 1.5 days. Subsections 5(3) and (4) of the DRPC apply;

k) Witness preparation/attendance fees (Dr. Voorneveld) - $2,500.00 - partially payable at $850.00 (3 hours of Arbitration attendance at $200.00/hr and $250.00 for preparation);

l) Conduct money (Dr. Jeremy Frank) - $57.68 - disallowed because Dr. Frank testified as an expert witness. Therefore, conduct money is not payable on top of his fees, as per subsections 5(3) and (4) of the DRPC; and

m) Conduct money (Robin Kadanoff) - $50.00 - disallowed because Ms. Kadanoff testified as an expert witness. Therefore, conduct money is not payable on top of her fees, as per subsections 5(3) and (4) of the DRPC.

Accordingly, I conclude that the Applicant is entitled to $27,933.54 for disbursements ($45,671.09 minus $17,737.55 (the total of the above amounts)), exclusive of HST, in accordance with Rule 78.1 of the DRPC and the Expense Regulation.

expenses:

For the reasons set out above, according to the criteria prescribed by the Insurance Act and the Regulations made thereunder, I award the Applicant expenses incurred in respect of this Arbitration proceeding, including the Hearing on Expenses, in the total amount of $67,688.74—representing $31,968.00 for legal fees plus $4,155.84 for HST thereon, and $27,933.54 for disbursements plus $3,631.36 for HST thereon.

Calculation of Interest on Past Benefits Awarded

The Applicant seeks an award of interest in the amount of $195,520.00 as of April 25, 2017, for the overdue payment of past attendant care benefits ($192,807.00) and housekeeping and home maintenance benefits ($2,713.00) awarded, pursuant to the 1996 Schedule.

Wawanesa requests an Order that no further interest is payable by the Insurer.

The issue is: when is interest overdue and payable on attendant care benefits that are owing by Wawanesa to the Applicant under the 1996 Schedule?

The Applicant relies on Mulhall v. Wawanesa,¹⁶ Van Galder v. Economical,¹⁷ and T.N. and Personal,¹⁸ and submits that interest is overdue and payable from the time the Insurer had sufficient information to be aware of the obligation to pay the benefit, regardless of whether the Insured had submitted a Form 1 at that time. If an Insured is awarded retroactive benefits, the interest begins to run from the time the Insurer was aware, or ought to have been aware, of the obligation to pay the benefits.

Wawanesa submits that the Mulhall, Van Galder and T.N. decisions relied upon by the Applicant have no application to the present case because they all involved a newer version of the Schedule than the 1996 Schedule, which governs the present case.

In T.N. and Mulhall, the Schedule only required an injured party to file an application, in response to which the Insurer would either (a) agree to the payments or (b) take the further step of requiring the Applicant to submit a form prepared by their healthcare professionals; whereas under the amended language in section 39 of the 1996 Schedule, as interpreted by the Divisional Court in Grigoroff v. Wawanesa,¹⁹ there is a requirement that the application for attendant care benefits be in a Form 1 before an Insurer is required to pay attendant care benefits.

In Grigoroff, the court considered section 39 of the 1996 Schedule, which was in effect at the time the Insurer received the Form 1, and held that the prescribed form for an assessment of attendant care needs is the Form 1 under this version of the Schedule, and that the Insurer was not required to pay interest until 10 business days had elapsed after the Form 1 was received by the Insurer.²⁰

Following the clear language of the 1996 Schedule, the court in Grigoroff concluded as follows:

An insurer is not required to pay a claim for attendant care needs until 10 business days after it receives an assessment of attendant care needs. In the case of the disputed benefits, that did not happen until February of 2009, when a revised assessment of attendant care needs was filed for the period January 20, 2002 to August 1, 2003. Under section 46(1) of the SABS, a payment is not overdue unless “the Insurer fails to pay the benefit within the time required” under s. 39 which is 10 business days from the receipt of an assessment of attendant care benefits. Further, s. 39(3) specifically provides that an insurer is not required to pay attendant care benefits before “an assessment of attendant care needs that complies with subsection (1) is submitted to the insurer.”²¹

In the present case, Ms. Kadanoff, Occupational Therapist, was retained by the Applicant in 2010 to perform a medical – legal attendant care assessment. Following this assessment, Ms. Kadanoff submitted Form 1s to the Insurer. The first of these Forms 1s was received by the Insurer on July 28, 2010. The applicable sections of the version of the Schedule that were in effect at that time are identical to the sections of the Schedule that were considered in Grigoroff.

Grigoroff was followed by Arbitrator Rogers in the Financial Services Commission of Ontario decision Nadesu and Zurich. Indeed, Arbitrator Rogers found that T.N. simply cannot be reconciled with Grigoroff, holding that:

In enforcing section 39 (1), the Divisional Court left no room for distinguishing this case on the facts and ruled out the “deemed application” approach the Arbitrator took in the decision in T.N. and Personal Insurance Company of Canada.²²

Arbitrator Rogers concluded that interest on attendant care benefits began accruing 10 business days from the date that the Applicant delivered the Form 1.²³

I agree with the analysis and reasoning in Grigoroff and Nadesu, both of which considered the version of the Schedule as applies to the present case, and I adopt it here.

I accept the submissions of counsel for Wawanesa, and conclude that Wawanesa was not required to pay the Applicant’s claim for attendant care needs until 10 business days after it received an assessment of attendant care needs, in the form of a Form 1.

Based on the evidence before me, I find that Wawanesa received the first Form 1 for an assessment of attendant care needs on July 28, 2010, and that the Insurer has paid all interest that was due and payable in respect of attendant care benefits and housekeeping and home maintenance benefits owing to the Applicant under the 1996 Schedule.

June 26, 2017

Marvin J. Huberman

Arbitrator

Date