Neutral Citation: 2017 ONFSCDRS 227 FSCO A15-008833

BETWEEN:

CHAO ZAN Applicant

and

CERTAS DIRECT INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Kimberly Parish Heard: In person at ADR Chambers on August 8, 2017

Appearances: Mr. Chao Zan did not participate Mr. Pavlos Achlioptas, Lawyer, participated on behalf of Yeung & Associates for Mr. Chao Zan Mr. Thomas Elliot, Lawyer, participated for Certas Direct Insurance Company

Issues:

The Applicant, Mr. Chao Zan, was injured in a motor vehicle accident on October 13, 2013 and sought accident benefits from Certas Direct Insurance Company (“Certas”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Zan, through his 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 Hearing are:

Should Yeung & Associates be removed as Mr. Zan’s legal representative for this Arbitration?
Should Mr. Zan’s Application for Arbitration be dismissed?
Is Certas entitled to its expenses for this Arbitration?

Result:

Yeung & Associates is removed as the Applicant’s legal representative for this Arbitration.
Mr. Zan’s Application for Arbitration is dismissed.
Certas is entitled to its expenses for this Arbitration in the amount of $6,221.42, inclusive of HST.

EVIDENCE AND ANALYSIS:

Chronology

A Pre-Hearing discussion in this case was held on July 13, 2016 at noon at the offices of the ADR Chambers. The Applicant participated, as did Ms. Tania Lee on behalf of the Insurer. Ms. Tania Shaheen, legal counsel, represented the Applicant. Mr. Thomas Elliot, legal counsel, represented the Insurer. The parties were unable to resolve the issues in dispute and at the Pre-Hearing, the Arbitration Hearing dates were scheduled for August 8 & 9, 2017.

Removal of Applicant’s Legal Representative from the Record for this Arbitration

At the Hearing, Mr. Achlioptas, on behalf of Yeung & Associates, raised an oral Motion requesting that Yeung & Associates be removed from the record as the Applicant’s legal representative for this Arbitration.

Counsel stated there had been a breakdown in the solicitor-client relationship. Yeung & Associates had been unable to obtain further instruction from the Applicant following the Applicant’s rejection of the Insurer’s last offer on June 23, 2017, and stated that they think the Applicant is currently in China.

Yeung & Associates provided a copy of their Motion Record, dated July 25, 2017, to all parties and ADR Chambers. It was served upon the Applicant by e-mail.

Yeung & Associates served a Supplementary Affidavit with a Motion Record, dated August 2, 2017, which contained a letter, dated July 26, 2017, to the Applicant’s last known address. The letter stated that Yeung & Associates was requesting to remove themselves from the record as the Applicant’s legal representative for this Arbitration and advised the Applicant to contact Yeung & Associates by August 2, 2017 if he wanted to participate in the Motion.

To date, Yeung & Associates has not received a response to their Motion from the Applicant.

The Insurer’s counsel stated the Insurer takes no position.

Based upon the submissions, I am allowing Yeung & Associates to be removed as the legal representative for the Applicant for this Arbitration. I find there has been a breakdown in the solicitor-client relationship. The Applicant has failed to attend the scheduled Hearing and has not provided Yeung & Associates with further instruction regarding the Hearing.

The Dismissal

As the Applicant failed to attend the scheduled Hearing for this matter, the Insurer’s counsel raised an oral Motion requesting this Application for Arbitration be dismissed with costs awarded against the Applicant.

Section F of the Expense Regulation within the Dispute Resolution Practice Code (“DRPC”) states the following:

An arbitrator shall, under subsection 282 (11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

Each party's degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
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.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
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.
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 Schedule — 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.

In their submissions for costs, the Insurer submitted criteria 1, 2, 4 and 7 of the Expense Regulation are applicable. The Insurer submitted they were 100% successful in this Arbitration. The Insurer served a Rule 76 offer to Yeung & Associates on June 22, 2017. It was an offer for $0.00, without costs. The offer was rejected by the Applicant through his counsel. The Insurer further submitted that the Applicant made a claim for Income Replacement Benefits (“IRBs.”) An Application for Mediation was filed on August 8, 2015, but a Disability Certificate (“OCF-3”) was not provided by the Applicant until December 11, 2015. As the Applicant was self-employed, the Insurer requested income documentation from the Applicant on four occasions. The Insurer then sought and obtained an Order from the Pre-Hearing Arbitrator, Arbitrator Gaster, for the income documentation which to date, the Insurer has not received. Subsequently, the Insurer has been unable to calculate the quantum of the IRB. The Applicant failed to attend four scheduled s. 44 Insurer’s Examination (“IE”) assessments for a psychology and a physiatry assessment. The Insurer lastly submitted that the Applicant returned to China in 2016 and counsel for the Applicant allegedly knew on June 23, 2017 that the Applicant had no intention of returning to Canada to attend the Hearing. It is the Insurer’s position that the Applicant has abandoned his claim. The Insurer provided a Bill of Costs outlining what the Insurer is seeking as a cost award against the Applicant.

Rule 37.9 of the 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 Applicant was provided with notice of the Hearing. The Hearing dates were scheduled at the Pre-Hearing which the Applicant attended. The Applicant did not attend the scheduled Hearing and the Hearing proceeded in his absence. The Applicant bears the onus of proving entitlement to the claimed benefits. Since he failed to appear at the Hearing and no evidence was presented to support his claim, his Application for Arbitration is dismissed.

EXPENSES:

The Bill of Costs provided by the Insurer listed a total of 71 hours billed from the inception of this file to date. The Insurer’s counsel is a Tier 2 Lawyer and eligible for the hourly rate of $122.78 as stipulated by the Legal Aid Tariff Rates. In addition, the Insurer has claimed an additional $505.68 plus HST for disbursements, which breakdown as follows: photocopying, long-distance phone calls, courier charges, outside printing charges, payment for video of surveillance records. All of these disbursements are justifiable and reasonable.

The Hearing for this file did not proceed past the first day as the Applicant failed to attend the Hearing. As a result, the Insurer was 100% successful at the Hearing in having the Applicant’s Application for Arbitration dismissed. The last offer made by the Insurer, which was for $0.00 without costs, was a better offer than an Award for Costs being claimed by the Insurer for its time spent to date on this Arbitration. I find that the Insurer was not able to properly adjust the Applicant’s claim for IRBs without first receiving an OCF-3. The Application for Mediation was filed prior to the Insurer receiving a copy of the OCF-3. I find this was improper. The Insurer has also submitted that the Applicant failed to attend IEs for a physiatry and a psychological assessment, and these assessments were rescheduled four times. The rescheduling of these IEs was unnecessary as the Applicant to date has failed to attend them. The Applicant has initiated a claim for accident benefits against the Insurer. The Applicant has failed to provide necessary income documentation required by the Insurer to calculate the quantum of the IRBs. The Insurer had to obtain an Order for the production of these documents but to date, had not received them. Lastly, the Applicant has failed to attend the Arbitration Hearing. I find this Arbitration has been unnecessary and has forced the Insurer to expend a substantial amount of time and expenses to defend this action against them, brought forward by the Applicant.

Based upon the information I have noted above, I fix costs against the Applicant in the amount of $5,000.00 for costs, plus $505.68 for disbursements, plus $715.74 for HST. This amount totals $6,221.42.

August 21, 2017

Kimberly Parish 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:

Yeung & Associates is removed as the Applicant’s legal representative for this Arbitration.
Mr. Zan’s Application for Arbitration is dismissed.
Certas is entitled to its expenses for this Arbitration in the amount of $6,221.42, inclusive of HST.