Mishal Rafi v. Aviva Canada Inc., 2018 ONFSCDRS 106

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2018 ONFSCDRS 106

Appeal P18-00006

Appellant

and

Respondent

BEFORE:

Delegate Jeffrey Rogers

Mr. Paul Barrafato, solicitor for Ms. Rafi

Mr. Paul Belanger, solicitor for Aviva

Heard by written submissions, completed on May 3, 2018

Under section 283 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 Regulation 664, R.R.O. 1990, as amended, it is ordered that:

This appeal is dismissed.
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

May 24, 2018

Jeffrey Rogers Director’s Delegate

Date

I. NATURE OF THE APPEAL

Ms. Rafi appeals the Arbitrator’s order of December 29, 2017. She submits that the Arbitrator erred in ordering her to pay Aviva its expenses of the arbitration in the amount of $17,755.18.

Ms. Rafi submits that the Arbitrator had no jurisdiction to decide expenses because she was not the hearing arbitrator and that she committed a litany of errors in making the award. For the reasons that follow, I endorse the Arbitrator’s reasons and I reject these submissions.

II. BACKGROUND

Ms. Rafi was injured in two automobile accidents on May 12, 2012 and on October 2, 2012. She claimed accident benefits from TD. She applied for arbitration after mediation did not resolve disputes about some of the benefits she claimed. The matter came for hearing before Arbitrator Schnapp. The issues in arbitration were:

Entitlement to non-earner benefits
Entitlement to treatment pursuant to three treatment plans, totaling $8,151.58, and
Entitlement to the cost of four examinations or assessments, totaling $5,933.97

After a 4-day hearing, followed by written submissions, Arbitrator Schnapp dismissed all of Ms. Rafi’s claims.

Arbitrator Schnapp found that Ms. Rafi was not entitled to non-earner benefits due to her failure to submit a disability certificate, and her failure to prove that she met the entitlement test. He found no evidence to support the claims for examinations or assessments, and no evidence relevant to the claims for treatment. Arbitrator Schnapp reserved the decision on the issue of expenses, with the proviso that the parties could request a hearing in writing pursuant to Rules 75 to 79 of the Dispute Resolution Practice Code, if they could not resolve the issue on their own.

The parties requested an expense hearing and the matter was assigned to Arbitrator Anschell, whose decision is the subject of this appeal. After reviewing written submissions from the parties, Arbitrator Anschell made the order detailed above. She rejected many of the submissions that Ms. Rafi repeats on appeal. She found that Aviva’s success was the only relevant criterion in determining entitlement to expenses. She concluded that Aviva’s claim was excessive and she substituted $17,755.18 as a reasonable amount.

III. ANALYSIS

Arbitrator Anschell had jurisdiction

I reject Ms. Rafi’s submission that Arbitrator Anschell lacked jurisdiction to decide the issue of expenses because she was not the hearing arbitrator. Rule 71, upon which Ms. Rafi relies, does not apply here. That Rule applies to circumstances in which “an adjudicator becomes unable, for any reason, to complete a hearing…” Arbitrator Schnapp did not start a hearing on the issue of expenses. He left the issue to be decided pursuant to Rules 75 to 79. Those Rules do not require the hearing arbitrator to decide expenses. They give jurisdiction to “an adjudicator” to decide the issue.

The same logic applies to Ms. Rafi’s submission that “he who hears must decide”. Since Arbitrator Schnapp did not hear the matter, he was not required to decide it. No issue of procedural fairness arises. A “broad strokes” approach is appropriate to the assessment of expenses. There was nothing in this case that required intimate knowledge of what took place at the hearing. Arbitrator Anschell was in as good a position to know the relevant procedural history, as Arbitrator Schnapp would have been.

The Rules of Criminal Procedure upon which Ms. Rafi relies are irrelevant.

The Arbitrator correctly applied the Expense Regulation

Section 282(11) of the Insurance Act gives arbitrators jurisdiction to award expenses “according to criteria prescribed by the regulations”. The Arbitrator was required to apply the Expense Regulation¹ in making her decision. It states:

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.

The Arbitrator’s award involves a straightforward exercise. Her discretion in determining entitlement to expenses is limited by the terms of the Expense Regulation. The amount she awarded was to be determined summarily, with reasonableness as the overriding consideration. It does not involve the kind of analysis Ms. Rafi detailed over her 9 pages of written submissions.

The Arbitrator concluded that Aviva’s success was the only relevant criterion in determining entitlement. She stated:

I am not convinced that there is anything in this case that would cause me to depart from the general rule of ordering expenses to the successful party. The Insurer was entirely successful with its response to Ms. Rafi’s application for benefits. There were no novel issues, and no offers to settle. I am not satisfied based on the submissions provided that any part of the proceeding was improper, vexatious or unnecessary. Based on the submissions, I do not find that the conduct of either representative prolonged or hindered this matter.

I agree with Mr. Belanger’s Reply Submission that the resources of the Applicant are not a factor to be considered. Furthermore, there was no evidence put forth to support this submission by Mr. Barrafato².

I agree with the Arbitrator. I see no basis for disturbing this ruling. Arbitrator Anschell did not misstate Arbitrator Schnapp’s finding regarding credibility, as Ms. Rafi submits. Arbitrator Anschell simply noted that Aviva submitted that Arbitrator Schnapp found Ms. Rafi to lack credibility. In fact, Arbitrator Schnapp found Ms. Rafi to be a credible witness. But that finding had no influence on the result of the hearing on expenses. Success was the only relevant criterion and Aviva was completely successful.

I recently dealt with submissions similar to Ms. Rafi’s in my decision in Hardi-Frail and TD Home and Auto Insurance³. I will not go into as much detail here. To summarize:

The Expense Regulation dictates a results based approach intended to encourage meritorious claims and, with limited exceptions listed in the Regulation, to discourage claims without merit. The exceptions do not apply here
The decision by the Legislature to move disputes regarding accident benefits to the Licence Appeals Tribunal is irrelevant since there was no change to the legislation as it applies at the Commission
The Arbitrator could not consider Ms. Rafi’s financial circumstances or her alleged good faith in bringing the application, because those matters are not among the prescribed criteria
Reasonableness is an overriding consideration in fixing the amount of expenses to be awarded. It is not an overriding consideration in determining entitlement to expenses
Proportionality is one aspect of reasonableness and the Arbitrator applied this principle in slashing Aviva’s claim by about 35%. Aviva claimed $26,996.97 for expenses. The Arbitrator found that to be excessive and applied a “broad strokes” approach to arrive at a reasonable amount which she fixed at $17,755.18
Consumer protection legislation requires broad interpretation. It does not dictate results that always favour the consumer
No appeal decision endorses the approach to expenses that Ms. Rafi proposes.

I repeat, I find no error by the Arbitrator. This appeal is therefore dismissed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

May 24, 2018

Jeffrey Rogers Director’s Delegate

Date

Footnotes

RRO 1990, Reg 664, s. 12
At pages 4 and 5
FSCO P17-00088, April , 2018