Neutral Citation: 2017 ONFSCDRS 216 FSCO A15-007741

BETWEEN:

MAHMOOD KHAN Applicant

and

CERTAS HOME AND AUTO INSURANCE COMPANY Insurer

*Minor error on pgs. 2 and Order corrected on August 16, 2017 in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedure Act.

Before: Arbitrator Paulina Gueller

Heard: In person at ADR Chambers on June 6, 2017

Appearances: Mr. Mahmood Khan did not participate Mr. Jordan Palmer represented Mr. Mahmood Khan Ms. Leslie Bonello participated on behalf of Certas Home and Auto Insurance Company Ms. Mouna Hanna represented Certas Home and Auto Insurance Company

Issues:

The Applicant, Mr. Mahmood Khan, was injured in a motor vehicle accident on October 25, 2011, and sought accident benefits from Certas Home and Auto Insurance Company (“Certas”), payable under the Schedule. ¹ The parties were unable to resolve their disputes through mediation, and Mr. Khan, through his representative, applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Hearing are:

Should Jordan Bronte Robertson Palmer Professional Corporation be removed from the record as Mr. Khan’s counsel?
Should Mr. Khan’s Application for Arbitration be dismissed?
Is Certas entitled to its expenses of this proceeding?
Is Mr. Khan entitled to his expenses for the cost of the second Motion raised by the Insurer?

Result:

Jordan Bronte Robertson Palmer Professional Corporation is removed from the record as Mr. Khan’s counsel.
Mr. Khan’s Application for Arbitration is dismissed.
Certas is entitled to its expenses of these proceedings in the amount of $2,270.46, inclusive of all fees, disbursements and HST.
Mr. Khan is entitled to his expenses for the second Motion in the amount of $500.00, inclusive of all fees, disbursements and HST.

EVIDENCE AND ANALYSIS:

Motion to be Removed from the Record as the Applicant’s Counsel

At the commencement of the Hearing, Mr. Palmer submitted that Jordan Bronte Robertson Palmer Professional Corporation was unable to obtain instructions from its client. Consequently, there was a breakdown in the solicitor-client relationship and Mr. Palmer requested Jordan Bronte Robertson Palmer Professional Corporation to be removed from the record as the Applicant’s counsel.

The Insurer did not take a position on the Motion from the Applicant’s counsel.

As the Applicant had not yet appeared, we recessed for 30 minutes to allow the Applicant to attend. The Applicant did not appear at the Hearing.

After the Hearing resumed, and upon reading the Applicant’s counsel motion materials and on hearing submissions of the parties, I accept the submissions of Jordan Bronte Robertson Palmer Professional Corporation that there was a breakdown in the solicitor-client relationship, as they were not able to obtain instructions from their client, and permitted Jordan Bronte Robertson Palmer Professional Corporation to be removed as counsel of record for the Applicant.

Background

Mr. Khan submitted an Application for Arbitration on November 2, 2015.

One Pre-Hearing discussion in this case was held on March 30, 2016. Two Motions were also heard in writing, as follows:

First Motion:

Raised by the Insurer: Whether the Applicant’s former counsel had a conflict of interest in representing the Applicant in the Arbitration proceeding?
Raised by the Applicant: A Counter Motion: Whether the Applicant could have been allowed to withdraw his Application for Arbitration?
The Insurer’s submissions were that the Insurer would have consented to the withdrawal, provided Certas would be able to seek its expenses.

Second Motion:

Whether Mr. Khan was precluded from proceeding to Arbitration with respect to a non-earner benefit?
Whether either party had entitlement to costs?

The Results of the Motions were as follows:

First Motion:

After several months of exchanging emails, the Applicant changed counsel and requested to continue with the Application for Arbitration. On October 27, 2016, Arbitrator Drory allowed the Applicant to continue with the Application for Arbitration. At the time, Arbitrator Drory did not award costs against Mr. Khan, but remarked that he would have assessed only the nominal amount of $250.00 against the Applicant. However, he deferred the matter of costs to the Hearing Arbitrator.

Second Motion:

Arbitrator Sherman found that the Applicant was not precluded from proceeding to Arbitration with respect to a non-earner benefit and he deferred the decision on costs to the Hearing Arbitrator.

Dismissal

At the Hearing, the Insurer raised a Motion to dismiss the Application for Arbitration. The Insurer submitted that the Applicant was fully aware of the date of the Hearing, and did not attend.

Rule 37.9 of the Dispute Resolution Practice Code (“DRPC”) states:

Where notice of hearing has been sent to a party and a party does not attend at an oral or electronic hearing, or participate in a written hearing, the arbitrator may proceed with the hearing in the party’s absence or without the party's participation, as the case may be, and the party is not entitled to any further notice in the proceeding.

I am satisfied that the notices sent to Mr. Khan complied with the requirements of Rule 9.1(c) of the DRPC and Section 6 of the Statutory Powers Procedure Act. Notwithstanding, Mr. Khan did not attend the Hearing.

Pursuant to Rule 37.9 of the DRPC, the Arbitration Hearing proceeded in Mr. Khan’s absence.

The Applicant bears the onus of proving entitlement to the claimed benefits. Since he did not appear at the Hearing and no evidence was presented to support the Applicant’s claims, this Application for Arbitration is dismissed.

EXPENSES:

Ms. Hanna submitted that the Insurer spent significant time in preparation for the Pre-Hearing and the Hearing. Certas provided me with a Bill of Costs for fees and disbursements in the amount of $10,827.53 (85.5 hours of combined legal and law clerk hours, and $270.46 for disbursements).

Ms. Hanna submitted that both parties discussed settlement. The Insurer offered to allow the Applicant to withdraw his Application for Arbitration, with costs, in the amount of $1.000.00, but the Applicant rejected the offer on May 24, 2017. Certas then offered the Applicant to settle by withdrawing the Application for Arbitration with $1,500.00 in costs up until one minute before the Hearing. Ms. Hanna submitted that the Applicant did not respond or attend the Hearing. Ms. Hanna also clarified that she spent 3 hours the day before preparing for the Hearing, and 2 hours coming to the Hearing, and that her Legal Aid Rate is $122.78 per hour.

The relevant criteria for the Arbitrator when awarding expenses to a party, if the adjudicator is satisfied that the award of expenses is justified, is set out in Rule 75.1 and 75.2 of the DRPC as follows:

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;

(d) 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;

(e) whether any aspect of the proceeding was improper, vexatious or unnecessary.

In awarding expenses, I am taking into consideration the relevant criteria, which include the party’s success in the proceedings and the conduct of the party that prolonged the proceeding unnecessarily. Mr. Khan attended the Pre-Hearing and participated in the two Motions in writing mentioned above. However, I also find in a later stage of the proceeding, Mr. Khan failed to instruct his counsel, prove his claim and attend the Hearing.

In awarding expenses, I have taken into consideration the result of the two Motions and the time both counsel spent preparing for the different stages in this proceeding. I accept Arbitrator Drory’s comments that he would have awarded $250.00 against the Applicant regarding the first Motion. Certas was the successful party at the Hearing. Mr. Khan succeeded on the second Motion.

I also find that Certas was aware the Applicant was not attending the Hearing. Certas did not prepare a Brief of documents, Book of Authorities or any material other than the Bill of Costs. Therefore, I find it is reasonable to grant some legal expenses.

Accordingly, I exercise my discretion pursuant to subsection 282(11) of the Insurance Act and order the following:

a) First Motion and Hearing: Certas is entitled to its expenses. I order Mr. Khan to pay Certas the amount of $2,270.46, inclusive of $250.00, all fees, disbursements, and HST;

b) Second Motion: Mr. Khan is entitled to expenses in the amount of $500.00, inclusive of all fees, disbursements and HST.

These amounts are payable forthwith.

August 8, 2017

Paulina Gueller Arbitrator

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:

Jordan Bronte Robertson Palmer Professional Corporation is removed from the record as Mr. Khan’s counsel.
Mr. Khan’s Application for Arbitration is dismissed.
Certas is entitled to its expenses of these proceedings in the amount of $2,270.46, inclusive of fees, disbursements, and HST.
Mr. Khan is entitled to his expenses for the second Motion in the amount of $500.00, inclusive of all fees, disbursements and HST.