Neutral Citation: 2017 ONFSCDRS 289 FSCO A12-004740

BETWEEN:

IOAN NAGY Applicant

and

JEVCO INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Barry S. Arbus, Q.C. Heard: By written submissions completed on September 1, 2017 Appearances: Ms. Samia Alam for Mr. Ioan Nagy Mr. Bradley Remigis for Jevco Insurance Company

Issues:

The Applicant, Mr. Ioan Nagy, was injured in a motor vehicle accident which occurred on June 10, 2005. The Applicant applied for and received statutory accident benefits from Jevco Insurance Company (the "Insurer") payable under Schedule.¹ The parties were unable to resolve their dispute through mediation and the Applicant applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

On November 8, 2010, the Applicant and the Insurer executed a Settlement Disclosure Notice in full and final release in favour of the Insurer. At the time of the execution of Settlement Disclosure Notice there was an unpaid Catastrophic Assessment Report ("CAT Report") and the Applicant subsequently applied for Arbitration for the unpaid CAT Report.

A portion of the Decision reads as follows:

The Applicant is precluded from proceeding to Arbitration on any issues in light of the November 8, 2010 Settlement Disclosure Notice and Release, and arising out of the June 10, 2005 motor vehicle accident.

Neither party made submissions on expenses, and because they were unable to resolve this issue, they subsequently scheduled an Expense Hearing before me in accordance with the provisions of Rule 79 of the Dispute Resolution Practice Code ("DRPC").

The issues arising herein are whether an Expense Order arising from this Hearing should be made in favour of the Insurer and, if so, in what amount?

Result:

The Insurer is entitled to expenses incurred with respect to this Hearing in the total amount of $13,387.31, inclusive of HST.

EVIDENCE AND ANALYSIS

I received written submissions from counsel for both parties to deal with the issue of expenses of this Arbitration. Under subsection 282(11) of the Insurance Act (as reiterated in Rule 75.2 of the DRPC), an Arbitrator shall 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;
Whether novel issues are raised;
The conduct of a party or the party's representative;
Whether any aspect of the proceeding was improper, vexatious or unnecessary.

After reviewing written submissions from both parties' counsel, I feel that the only two issues that are relevant for the Decision in this matter are item 1, "each party's degree of success in the outcome of the proceeding", and, item 5, "whether any aspect of the proceeding was improper, vexatious or unnecessary".

With respect to item number 1, the parties both acknowledged that the Insurer was successful in all issues raised in the outcome of the proceedings, and the Applicant was unsuccessful.

The Applicant's counsel suggests that the appropriate range of determining fees to be allowed for a successful counsel fee for preparation for a hearing of this nature should be a ratio of 3 or 4 times the hours spent at the hearing, depending on the complexity of the case. The Applicant's counsel suggests that the Insurer spent a total of 59.9 hours including research and submissions, and because the Hearing was only 6 hours, the Insurer should not be entitled to the total 59.9 hours which is a ratio of almost 10 to 1.

THE LAW

An hourly amount for legal fees is governed by Rule 78 of the DRPC which provides that the hourly rate ($109.14) established under the Legal Aid Services Act, 1998 shall apply.

The Insurer, in submitting its Bill of Costs, provided a time summary for Bradley Remigis and Jeffrey Naganobu, plus Lauren Millward, a law clerk. Although Mr. Naganobu had in excess of ten years' experience, the Insurer, in seeking only the hourly rate established under the Legal Aid Services Act, 1998 for both counsel.

With respect to item number 5, the Insurer submitted that the Applicant's counsel took unnecessary positions in its submissions on behalf of the Applicant. The Insurer takes the position that the Applicant, Mr. Nagy, testified that he had nothing to do with this file after it had been settled in October 2010. The evidence confirmed that the original application for this Arbitration was filed in the name of AssessNet Inc. ("AssessNet") and was subsequently changed into Mr. Nagy's name, and AssessNet, through its principal, Dr. Percy, was instructing counsel for the Applicant.

Although the Applicant argues that this case is unlike the Akbulut² case, where AssessNet was seeking status in the file, I am satisfied that the fact that AssessNet filed the original Application for Mediation as the Insured in this file, albeit later corrected to the Applicant's name, and the fact that AssessNet has been the driving force behind this application permits me to give an expense award directly against them.

The bulk of the submissions were focused on AssessNet's attempt to recoup its costs for its CAT Report. The claim fell outside the scope of the original Settlement Disclosure Notice and Full and Final Release.

I am satisfied that the appropriate party to pay costs is AssessNet Inc., as it was the party instructing the conduct of the Hearing and it is appropriate to award costs against AssessNet Inc., rather than Mr. Nagy.

I am satisfied that the Insurer's submissions that, because a majority of the Applicant's submissions were unnecessary, additional time was spent by the Insurer in preparation for the Hearing than would otherwise be necessary. I also note that there are no expenses claimed for the appeal, and the disbursements expended by the Insurer appear more than reasonable.

Accordingly, in reviewing the time expended in preparing for and attending at the Hearing on the decision on the preliminary issues, I am satisfied that the total time expended, being 59.9 hours by the respective lawyers and law clerks is reasonable and appropriate for this arbitration. Accordingly, I award the Insurer the sum of $13,387.31, inclusive of HST.

November 2, 2017

Barry S. Arbus, Q.C. Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2017 ONFSCDRS 289 A12-004740