Eugen Botezatu v. Certas Home and Auto Insurance Company, 2018 ONFSCDRS 157

Financial Services Commission of Ontario Commission des services financiers de l’Ontario

Neutral Citation: 2018 ONFSCDRS 157 Appeal P18-00036

OFFICE OF THE DIRECTOR OF ARBITRATIONS

EUGEN BOTEZATU Appellant

and

CERTAS HOME AND AUTO INSURANCE COMPANY Respondent

BEFORE: David Evans

REPRESENTATIVES: Georgiana Masgras for Mr. Eugen Botezatu Patrick Baker for Certas Home and Auto Insurance Company

HEARING DATE: On the record, with submissions received by September 13, 2018

APPEAL ORDER

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:

1. The appeal is dismissed, and the Arbitrator’s decision dated May 8, 2018 is affirmed.

2. A party may seek an order of legal appeal expenses, as set out below.

December 12, 2018

David Evans Director’s Delegate Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Botezatu appeals Arbitrator Smith’s expenses decision of May 8, 2018, wherein he awarded Home and Auto Insurance Company arbitration expenses fixed at $6,037.84 (inclusive of fees, disbursements and any applicable taxes).

However, Mr. Botezatu’s submissions rely on submissions and evidence that were not before the Arbitrator. Therefore, I have no jurisdiction to intervene.

II. BACKGROUND

Mr. Botezatu was injured in an automobile accident on July 24, 2013, and sought accident benefits from Certas pursuant to the SABS–2010.¹ Mr. Botezatu disputed the denial of non-earner benefits (NEBs), medical benefits and costs of examinations.

At a January 2016 pre-hearing before Arbitrator Sapin, Certas raised two main preliminary issues: whether Mr. Botezatu failed to attend an examination under oath (EUO), and whether he was precluded from claiming NEBs for having previously elected to receive an income replacement benefit.

In a letter dated August 15, 2016, Arbitrator Mervin, who now had conduct of the file, confirmed that the parties had just reached agreement on the EUO issue, leaving only the NEB preclusion issue. Arbitrator Mervin conducted a telephone conference hearing on August 22, 2016, and in his decision dated June 26, 2017, found Mr. Botezatu could proceed on the NEB claim. An arbitration hearing was then scheduled to begin on August 8, 2017. On August 2, 2017, the parties reached a settlement agreement that they reported to FSCO. Pursuant to the Dispute Resolution Practice Code, 20 days later FSCO closed the file.

However, as set out by Arbitrator Smith in the decision under appeal, Certas did not receive an executed Full and Final Release or Settlement Disclosure Notice from Mr. Botezatu. Rather, on August 28, 2017, he filed a new Application for Arbitration with the Ontario License Appeal Tribunal (“LAT”) regarding the same NEB issue that he had earlier claimed at FSCO.

Certas subsequently requested that FSCO re-open the file because FSCO still had jurisdiction over the NEB dispute. Arbitrator Smith conducted a resumed pre-hearing discussion on March 8, 2018. In his letter of March 12, 2018, he noted that Mr. Botezatu now wished to withdraw the FSCO application and proceed at the LAT. Certas did not consent to the withdrawal. Arbitrator Smith then ordered that, pursuant to R. 70.3, he permitted the withdrawal, “the file remains administratively closed,” and he would determine any expenses Mr. Botezatu had to pay Certas.

The Arbitrator also noted that while Mr. Botezatu had withdrawn his LAT application on March 8, 2018, his representative’s statement that the LAT litigation was “on-going” meant that he intended to re-file at the LAT in the future.

The parties then provided written submissions. The Arbitrator considered four issues relevant, namely success, novelty, conduct, and aspects of the proceeding that were improper, vexatious or unnecessary. Mr. Botezatu’s submissions on these points were terse:

1. The Arbitration Hearing never took place, therefore, it can not be determined [sic] each party’s degree of success with respect to the issues in dispute.
2. A settlement offer was made and accepted by Mr. Botezatu, however, he had the right to changed [sic] his mind, in accordance with the cooling off period;
3. Mr. Botezatu appealed in bona fide [sic] to the Licence Appeal Tribunal due to the fact that FSCO was no longer accepting applications for arbitration of April 1, 2016; and
4. There is an ongoing LAT Litigation, costs will be awarded pursuant to the Licence Appeal Tribunal Common Rules of Practice and Procedure.

In the result, the only criterion the Arbitrator applied in favour of Certas was whether the conduct of a party or a party’s representative tended to prolong, obstruct or hinder the proceeding. The Arbitrator agreed that Mr. Botezatu had a right to rescind the settlement agreement during the cooling off period. However, he found that Mr. Botezatu’s initial resistance to attending an EUO and the resulting preparation for a preliminary issue hearing prolonged, obstructed and hindered the process. He also found that the re-convened pre-hearing teleconference held on March 8, 2018, unnecessarily prolonged and hindered the process, as Mr. Botezatu could have, concurrent with filing the LAT Application, requested a withdrawal of the FSCO application subject to any possible expense consequences.

Turning to the quantum of expenses, the Arbitrator did not award all the expenses claimed by Certas. He found that the work hours incurred by Certas regarding the preliminary issue hearing and the further pre-hearing teleconference should be reimbursed. However, he found that the hours spent by Certas defending the NEB claim was not time “thrown away” because that work would still be useful at the LAT. He also awarded the reasonable disbursements claimed.

III. ANALYSIS

As was recently stated by the Divisional Court in Clancy v. Aviva Canada Incorporated, 2018 ONSC 5390, “A costs appeal is a difficult proceeding in which to succeed. Costs orders are highly discretionary. They are entitled to significant deference on appeal or judicial review.”

Beyond that, appeals are only on question of law. As has been seen above, Mr. Botezatu’s submissions were exceedingly brief, and the Arbitrator dealt with them. However, Mr. Botezatu’s Notice of Appeal contained numerous new issues as grounds for relief and asked for a stay of the order. I wrote on July 12, 2018 that

the request for a stay of the Arbitrator’s order is denied. I find that the strength of the appeal does not warrant a stay because it appears the Arbitrator addressed the issues raised before him. For further guidance, I will only be considering any alleged errors of law with respect to those issues and will not consider new issues that were not before the Arbitrator.

Nonetheless, Mr. Botezatu’s submissions contain new issues that were not before the Arbitrator. New issues on appeal can only be considered if no new facts need to be found. For instance, submissions on new cases since the arbitration that apply to existing findings may be considered. However, Mr. Botezatu’s submissions are not such, as they require further findings. It is not my role to make factual findings.

For instance, Mr. Botezatu submits that Certas was out of time to claim its expenses of the preliminary issue hearing. However, Arbitrator Mervin specifically left the issue of expenses of the preliminary issue hearing to the hearing arbitrator. Beyond that, Rule 50.2 provides that a party may not appeal a preliminary or interim order of an arbitrator – like the order of Arbitrator Mervin – until all of the issues in dispute in the arbitration have been finally decided, unless the Director or his delegate orders otherwise. Given those factors, it is highly unlikely Certas could have sought its expenses any earlier. In any event, Mr. Botezatu should have raised the issue of a limitation period with respect to claiming expenses, whatever its merits, before Arbitrator Smith.

Mr. Botezatu then goes on to submit that he should be entitled to the expenses of the preliminary issue hearing. Presumably, his argument about the limitation period only applies to Certas. Regardless, Arbitrator Smith, in his letter of March 12, 2018, stated that the only issue before him was whether Mr. Botezatu owed Certas its expenses. Mr. Botezatu cannot raise on appeal whether Certas owes him expenses of the preliminary issue hearing.

Mr. Botezatu submits that Certas did not lead evidence of his failure to attend the EUO, so there was a “palpable and overriding error” in Arbitrator Smith’s decision. On August 9, 2018, I wrote the following:

Further to the Appellant’s submissions received by fax today, I refer the parties to Belair Direct Insurance Company v. Green, 2018 ONSC 2782, where the Divisional Court stated that the “palpable and overriding error” standard does not apply to appeals at FSCO, since we cannot review errors of fact by re-weighing the evidence.

Beyond that, the evidence before the Arbitrator was that Mr. Botezatu waited until the last minute to agree to attend the EUO, as set out in Arbitrator Mervin’s letter of August 15, 2016. If Mr. Botezatu had other evidence or submissions to suggest he had not delayed the proceeding, he should have presented it to Arbitrator Smith. I find there was evidence before Arbitrator Smith to support his finding that Mr. Botezatu’s actions prolonged, obstructed or unnecessarily hindered the proceedings. I have no reason to intervene.

Similarly, Mr. Botezatu submits that Certas’s preparation was for the NEB claim and not the EUO issue. However, if Mr. Botezatu had earlier agreed to attend the EUO, despite what is in Arbitrator Mervin’s letter, then he should have so advised Arbitrator Smith and presented evidence to that effect. Even then, Arbitrator Smith would have been entitled to determine which portion of the preparation by Certas was devoted to the EUO issue. I am in no position to do so.

Mr. Botezatu submits that there could be no dispute to withdraw, as FSCO had closed the file after the (later rescinded) settlement. In that case, there could be no expenses assessed for a withdrawal of a non-existent dispute. However, the mere fact that FSCO closed its file did not make the dispute magically disappear. That is why counsel for insurers often sought dismissal orders after a settlement and a resulting file closure, as until there was a dismissal, the dispute still existed. Counsel often discussed such dismissal orders at the counsel forums held at FSCO: see for example http://www.fsco.gov.on.ca/en/drs/counselforum/Pages/2004-11-26.aspx, the minutes of November 26, 2004. In addition, FSCO often reopened files to deal with ongoing disputes after alleged settlements. For an extreme example, see Vaitheeswaran and State Farm Mutual Automobile Insurance Company, (FSCO P17-00002, August 23, 2018). Accordingly, I find no merit in this submission either.

In conclusion, I find that Arbitrator Smith made findings on the issues and evidence before him. I find no error of law. Accordingly, the appeal is dismissed and the order of Arbitrator Smith is affirmed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, any party seeking expenses should serve and file a Bill of Expenses within 45 days of the date of this decision, including any written submissions on entitlement and other particulars. The opposing party will then have 30 days to serve and file a response. The party seeking expenses will then have 15 days to serve and file a reply and any required documentation. The hearing will be on the record.

December 12, 2018

David Evans Director’s Delegate Date

Footnotes

1. 1The Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10, as amended.