Neutral Citation: 2017 ONFSCDRS 316 FSCO A15-002421

BETWEEN:

PETER DZIUBA Applicant

and

TD GENERAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Kimberly Parish Heard: By written submissions completed on November 3, 2017

Appearances: Mr. Stefan Juzkiw, Lawyer for Mr. Peter Dziuba Mr. Jason Anand and Ms. Aida Gregorian, Lawyers for TD General Insurance Company

Issues:

The Applicant, Mr. Peter Dziuba ("Mr. Dziuba"), alleged to have sustained injuries from a motor vehicle accident on August 17, 2014 and sought accident benefits from TD General Insurance Company ("TD"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Dziuba, 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 Expense Hearing are:

Is Mr. Dziuba liable to pay TD's expenses in respect of the Arbitration proceeding under section 282(11) of the Insurance Act?

Result:

Mr. Dziuba is liable to pay TD's expenses in respect of this Arbitration in the amount of $3028.22 (inclusive of fees, disbursements, and HST).

EVIDENCE AND ANALYSIS:

Background

An in-person Preliminary Issue Hearing was held on July 24, 2017, with written submissions completed on July 26, 2017. The Preliminary Issue Hearing addressed whether there was an "accident" within the meaning of the Schedule. I issued my written decision with reasons dated September 18, 2017 which found there was no "accident" within the meaning of the Schedule.

On October 6, 2017, ADR Chambers received a letter by fax from the Insurer's counsel, Mr. Jason Anand ("Mr. Anand"). In the letter, Mr. Anand advised that the parties were unable to agree on the issue of costs following the Preliminary Issue Hearing and requested a determination be made with respect to the costs in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code ("DRPC").

On October 11, 2017, I set a timetable for the Expense Hearing to proceed via written submissions.

TD's Position

TD submits that it was the successful party on the Preliminary Issue in which a determination was made that an "accident" did not happen within the meaning of the Schedule.

It was submitted by TD that it made several attempts to resolve this matter prior to proceeding to a Preliminary Issue Hearing. This was evidenced by a letter from TD dated January 8, 2016 to Mr. Dziuba. At that time, Mr. Dziuba was self-represented. The letter noted TD's position that Mr. Dziuba was not involved in an "accident" for the purpose of obtaining accident benefits and the letter noted to Mr. Dziuba that he could choose to abandon his claim and TD,

"will likely agree to dismiss the claim without costs. If you do not, we intend to ask for a date at February's prehearing to address this issue by way of preliminary hearing and seek to have you personally pay our costs for doing so."²

TD submitted Mr. Dziuba provided no response to its letter. It was further submitted by TD that two verbal offers to settle on a full and final basis were extended to Mr. Dziuba, on December 8, 2016 and on February 5, 2017. TD submits both offers were verbally rejected by Mr. Dziuba. It is TD's position that all of its offers were more favourable to Mr. Dziuba than the outcome which was reached at the Preliminary Issue Hearing. Further, TD submitted that had Mr. Dziuba accepted one of the offers made by the Insurer, the matters would have resolved without proceeding at the Preliminary Issue Hearing.

TD submitted that it had to deal with multiple adjournments and various different counsels since this dispute's inception. TD undertook extensive preparation for the Preliminary Issue Hearing, while also preparing for the October 13, 2017 Hearing which would have taken place had Mr. Dziuba been successful at the July 24, 2017 Preliminary Issue Hearing.

TD noted that Mr. Dziuba did not comply with the Order for productions contained in the Pre-Hearing letter dated December 8, 2016.³ TD sent three follow-up letters requesting the productions on December 9, 2016, March 22, 2017, and April 26, 2017.

It is TD's submission that there were documents which Mr. Dziuba had in his possession for over two years but only disclosed to TD at the first scheduled Preliminary Issue Hearing on June 23, 2017. This necessitated an adjournment and further prolonged the Preliminary Issue Hearing. Further, TD submitted that during the Preliminary Issue Hearing, Mr. Dziuba refused to answer questions on cross-examination which tended to prolong the Hearing.

TD submits the Applicant's submissions were received at 6:35 p.m. on November 1, 2017. Pursuant to Rule 8 of the DRPC, the Applicant served his materials after 4:45 p.m. and the materials are therefore deemed to have been received on November 2, 2017. TD further submits this does not coincide with the original timetable noted within my e-mail on October 11, 2017 which noted the Applicant's submissions were due on November 1, 2017. TD requested that I not consider the Applicant's submissions. TD further submitted that if the Applicant's submissions are accepted, TD submits its costs are justified and warranted.

TD further submitted that an award for expenses to the successful party is not intimidation or reprisal and the criteria for considering an award for costs are outlined in Rule 75 of the DRPC.

TD seeks an Order for costs in the total amount of $24,182.62 in accordance with the Expense Regulation, section 75 of the DRPC.

TD provided a Bill of Costs with a breakdown for its expenses. TD requested 190.4 hours for legal fees which includes time spent by six lawyers whose years of call range from 2000 to 2014, plus two law clerks. The amount claimed for legal fees is $20,505.00 plus $2,665.65 for HST, which totals $23,170.65.

TD is claiming disbursements in the amount of $977.97 which breaks down as follows: $437.31 for process server fees, $89.22 for courier charges, and $451.44 for the court reporter fee.

Mr. Dziuba's Position

It is Mr. Dziuba's submission that the expense award being claimed by TD is "punitive and excessive". Mr. Dziuba has submitted that he is a recipient on the Ontario Disability Support program ("ODSP") and his ability to pay is relevant to the issue of expenses. Provided with Mr. Dziuba's submissions was a copy of a September 2017 ODSP Statement of Assistance confirming the amount received by Mr. Dziuba. Further, it is Mr. Dziuba's submission that "the legislative imperative and the Human Rights Requirement" do not allow an expense award that would place the "Appellant or the Respondent into hardship." Further it is Mr. Dziuba's position that as he is an ODSP recipient; he is in the highest needs category. The hardship that Mr. Dziuba would face as the result of an expense award against him would be extreme. It could also deter him and other members within the disabled community from pursuing a claim for benefits in the future. This would result in an offence under section 37 "intimidation" and "reprisal" of the Accessibility for Ontarians with Disabilities Act, 2005.⁴

Mr. Dziuba submitted that when considering an award for expenses which is both fair and reasonable, the Arbitrator must take into account all factors including the means of the individual to pay the award. Mr. Dziuba lastly submitted a request for a nominal cost award of $500.00 with an open term, and that this award is stayed pending the upcoming appeal.

Analysis:

I will not disregard Mr. Dziuba's cost submissions which were received after 4:45 p.m. on November 1, 2017 as I find the prejudice to the Applicant would outweigh any prejudice to the Insurer. Further I rely on Rule 81.1 of the DRPC.

In considering an award for expenses, I am required to consider the criteria listed under section 282(11) of the [Insurance Act]⁵ which are also listed under section 75 and section F of the Expense Regulation contained within the DRPC.

TD was the successful party at the Preliminary Issue Hearing.

It was provided through TD's written submissions that the Insurer made three prior offers to settle with Mr. Dziuba. Only one of the three offers was provided in writing. The written offer to settle made by TD was dated January 8, 2016 and it was for a withdrawal of the Application for Arbitration without costs. At the time this offer was made to Mr. Dziuba he was self-represented and he may not have been able to understand the merits and risks of pursuing his claim for accident benefits against TD. I will not give consideration to the other two verbal offers to settle made by TD as they were not written offers to settle.

TD submitted Mr. Dziuba withheld documents which necessitated a further adjournment. Within the submissions from TD was a letter I issued to the parties dated June 23, 2017.⁶ The letter outlined my reasons for adjourning the Preliminary Issue Hearing to July 24, 2017. My letter noted:

"As both sides have filed documentation for the Preliminary Issue Hearing within the past 48 hours, I did not find it appropriate that I exclude documentation from either side. I made a ruling and allowed a brief adjournment of the Preliminary Issue Hearing to a date mutually agreed upon by the parties to facilitate with the documentation issues."

Therefore I do not find that the adjournment of the Hearing from the date of June 23, 2017 to July 24, 2017 can be solely placed upon the Applicant.

I recognize that Mr. Dziuba had retained different legal representatives throughout the course of this Arbitration proceeding. However, I am unaware of the circumstances surrounding why the legal representation has changed and therefore I do not find Mr. Dziuba can be held accountable for any delay this may have caused with the Arbitration proceedings.

At the Preliminary Issue Hearing, Mr. Dziuba did not provide a response to certain questions posed to him by the Insurer's counsel while under cross-examination. I do not find this lack of response significantly hindered or prolonged the Preliminary Issue Hearing.

Regarding the quantum of expenses claimed, TD submitted it undertook extensive preparation for the Preliminary Issue Hearing while preparing for a Hearing for this file which would have taken place on October 13, 2017 had Mr. Dziuba been successful at the Preliminary Issue Hearing. The dates for the Hearing were rescheduled on consent of the parties when they attended the originally scheduled Preliminary Issue Hearing on June 23, 2017. This was noted in my letter to the parties dated June 23, 2017.⁷ I do not accept that TD found it necessary to undertake a great number of hours preparing for the Hearing. The purpose of the Preliminary Issue Hearing was to determine if this claim was to be moving forward to a Hearing and my Decision on a Preliminary Issue dated September 18, 2017 determined the matter would not be moving forward to a Hearing. Significant amounts of time spent on preparation for the Hearing is therefore not a consideration in my award for expenses for the Preliminary Issue Hearing.

With regard to the disbursements claimed by TD, the amount of $451.44 claimed for court reporter fees is not an expense payable under the Expense Regulation of the DRPC.

Through Mr. Dziuba's submissions, it has been noted he is receiving benefits through ODSP and further that this directly impacts his ability to pay with respect to a cost award. Further, Mr. Dziuba submits he should not be placed in a situation of undue hardship.

I am to be assessing the criteria for expenses in accordance with the expense criteria listed within section 282(11) of the Insurance Act and the Expense Regulation of the DRPC. My assessment of expenses is not based upon a party's ability to pay. However in considering the principles of fairness, Mr. Dziuba should not be punished by having to pay TD's substantial legal expenses. The Schedule is governed by consumer protection legislation and I do not believe the legislative intent was to financially penalize claimants who believe they have legitimate disputes and elect to pursue their claim for accident benefits against an insurer.

EXPENSES:

Based upon the reasons noted in considering an award for expenses, I find the amount being claimed by TD to be excessive. In determining the appropriate quantum of expenses, the objective is to fix an amount that is fair and reasonable given the number of issues, their complexity and the amounts in dispute. I find that a fair and reasonable amount for expenses is a ratio of 2:1 for TD's legal fees. Taking into consideration time spent at the Pre-Hearing and for the time spent on the preparation and attendance at the Preliminary Issue Hearing, I am therefore awarding 20 hours for legal fees in accordance with the Legal Aid Tariff Rates. I am awarding 4 hours at the rate of $122.78 per hour plus 16 hours at the rate of $109.14 per hour which equals $2237.36 plus HST $290.86. The total amount awarded for legal fees is $2528.22. For disbursements, I am awarding $500.00. Therefore the total amount awarded for TD's expenses is $3028.22 (inclusive of fees, disbursements, and HST).

November 27, 2017

Kimberly Parish Arbitrator

Financial Services Commission of Ontario