Neutral Citation: 2018 ONFSCDRS 45 FSCO A15-004848

Between:

Sakina Naqvi Applicant

and

TD General Insurance Company Insurer

Decision on Expenses

Before: Arbitrator Deborah C. Anschell

Heard: By oral submissions on December 12, 2017 and written submissions dated December 15, 2017 and December 22, 2017

Appearances: Ms. Aida Davari and Mr. R.P. O’Connor for the Applicant Mr. Domenic Nicassio for the Insurer

Issues

The Applicant, Ms. Sakina Naqvi, was injured in a motor vehicle accident on October 10, 2012, 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 Ms. Naqvi, through her 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 Hearing was scheduled to take place in Toronto for four days commencing on December 12, 2017.

The issues to be dealt with at the Hearing were the following:

Is Ms. Naqvi entitled to receive a weekly income replacement benefit of $364.53 commencing October 17, 2012 to date and on-going?
Is Ms. Naqvi entitled to receive a medical benefit as submitted by Prime Health Care for: a) $3405.58 for OCF-18 dated April 18, 2013; b) $4305.58 for an OCF-18 dated January 24, 2013; c) $4166.40 for an OCF-18 dated January 24, 2013?
Is Ms. Naqvi entitled to attendant care benefits of $3000.00 per month commencing March 5, 2013 up to October 10, 2014?
Is Ms. Naqvi entitled to payments for the cost of examinations for $1981.70 for driver rehab dated June 28, 2013 as submitted by Prime Health Care?
Is TD liable to pay Ms. Naqvi’s expenses in respect of the arbitration?
Is Ms. Naqvi liable to pay TD’s expenses in respect of the arbitration?
Is Ms. Naqvi entitled to interest for the overdue payment of benefits?

The Hearing did not proceed as scheduled. The Applicant sought to withdraw the Application for Arbitration three days before the scheduled Hearing.

The issues in this Expense Hearing are:

Should the Applicant be permitted to withdraw the Application, and on what terms?
What, if any, is the amount of expenses that should be awarded to TD?

Result

The Applicant is permitted to withdraw the Application, subject to this expense award.
The Insurer is entitled to its expenses in the amount of $42,134.02.

Evidence and Analysis

With respect to the withdrawal of the Application, Mr. Nicassio submitted that any withdrawal of the Application be made on specific terms and conditions. The withdrawal should occur on a with prejudice basis. Mr. Nicassio submitted that a with-prejudice withdrawal is appropriate given the late request to withdraw.

Mr. Nicassio submitted that a with-prejudice withdrawal would ensure that TD is not required to respond to a similar application in the future.

With respect to Expenses, under subsection 282(11) of the Insurance Act (as reiterated in Rule 75.2 of the Dispute Resolution Practice Code (“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.

Both parties provided detailed written submissions with respect to the issue of Expenses. Mr. Nicassio is seeking $53,573.79 for fees and disbursements, at Legal Aid rates.

Mr. Nicassio submitted that this matter involved a late request by the Applicant to withdraw her Application without consent of the Insurer just three business days prior to the anticipated hearing date of December 12, 2017. By that time the Insurer had already prepared for the Hearing twice (a previous hearing date of July 5, 2017 was adjourned). Further, TD prepared three motions related to non-compliance by the Applicant regarding relevant documentation.

Mr. Nicassio submitted that the Applicant’s request to withdraw indicated that she understood that she would not succeed at the Hearing. Thus, TD was successful even before the onset of the Hearing. TD is therefore entitled to an award of costs.

Mr. Nicassio submitted that legal fees began to accrue on June 29, 2015. The file had a lengthy history. There were three failures of the Applicant to attend an Examination Under Oath. Further, a motion was brought in November, 2016 for production of documents. A further motion for productions was heard by teleconference on March 1, 2017.

After three attempts to examine the Applicant under oath, she finally attended on August 11, 2016. Her legal representative refused to allow her to answer a long list of relevant questions.

The legal expenses incurred were reasonable, proportionate and appropriate given the history of the claim and the nature of the issues in dispute. Mr. Nicassio submitted that fairness requires that the Applicant pay TD’s expenses. TD consistently insisted that its costs be paid.

Mr. Nicassio submitted that the files involved complex issues requiring experienced counsel. The Applicant was involved in a prior fraudulent accident claim. A cost order in relation to that claim was outstanding when this Application was made.

TD brought six motions to prepare the file for arbitration. It obtained two engineer reports, three addendum reports, an accounting report, and incurred investigation expenses.

Mr. Nicassio submitted that the highest hourly rate available should be applied to the legal time given the complexity of the file. He submitted that the Applicant obstructed, hindered and prolonged the proceeding by:

Not attending three scheduled Examinations Under Oath;
Not producing relevant documentation that was requested at the Examination Under Oath;
Requiring TD to bring a motion in relation to that documentation;
Not complying with the Arbitrator’s order to disclose that documentation;
Agreeing through her representative to resolve the issues on or about July 4, 2017 without the need for a hearing;
Failing to follow through with that agreement;
Agreeing through her representative to reschedule the Hearing for December 12, 2017;
Withdrawing the Application three business days before the Hearing was scheduled to begin.

In response, Mr. O’Connor submitted that a withdrawal on with prejudice basis would be inappropriate in the circumstances. The request to withdraw the Application for Arbitration has already been granted, and as such is res judicata.

Mr. O’Connor submitted that with respect to the missed Examinations Under Oath, the Applicant was ill on one occasion, and the second examination was scheduled during Ramadan, a period of religious observance for the Applicant. Mr. O’Connor submitted that a few unattended Examinations Under Oath should not attract an award for expenses, and does not take into consideration the legitimate reasons for the Applicant’s non-attendance.

Overall, Mr. O’Connor submitted that this proceeding does not merit an award of expenses pursuant to Rule 70 of the DRPC, or in the alternative, an award for expenses should be nominal. Mr. O’Connor submitted that each party should bear their own expenses with respect to the withdrawn Application.

Mr. O’Connor submitted that there were discussions to settle this matter. However, TD’s written offers to settle were solely based on its position that the Applicant had allegedly participated in a fraudulent scheme in the past. Accordingly, the offers submitted by TD were nominal, and did not reflect the issues in dispute.

Mr. O’Connor submitted that TD’s conduct prolonged and hindered the proceedings. TD raised a preliminary issue alleging that the subject accident was not an “accident” as defined by the Schedule.

Further, multiple motions regarding productions and dismissals served to prolong the proceedings. Mr. O’Connor submitted that expenses relating to preparation for motions not heard or not won by TD should not attract an award for expenses.

With respect to questions not answered at the Examination Under Oath, it is within the Applicant’s representative’s discretion to refuse questions at an Examination Under Oath.

Mr. O’Connor submitted that TD made several requests for documentation which related to the Applicant’s third-party claim which were irrelevant. Further, TD brought various unnecessary motions in order to obtain irrelevant information. These motions caused further delays within the proceeding. There was nothing revealed by the facts of this case to conclude that the Applicant’s claim was unmeritorious.

Mr. O’Connor submitted that TD is not entitled to an expense award. Each party shall bear their own expenses.

In the alternative, any award for expenses should be minimal having regard to FSCO arbitral jurisprudence, the circumstances of TD’s alleged incurred expenses, and the Applicant’s financial situation. No oral hearings were held on December 12, 2017 and the Applicant provided an advance warning of three business days with respect to her intention to withdraw her Application orally pursuant to Rule 70.1 (c) of the DRPC.

With respect to the issue of the withdrawal of the Application for Arbitration, I agree with the Applicant’s submissions that the Application to withdraw the Arbitration was granted, subject to submissions with respect to Expenses. Accordingly, it would be inappropriate to revisit this issue and to order the withdrawal to be with prejudice. The Application was withdrawn on December 12, 2017, subject only to further submissions relating to expenses.

On balance, I find that TD is entitled to its costs for this matter. It experienced a complete success in the sense that the Applicant did not proceed with any of her claims sought in the Arbitration. There were no novel issues raised in the proceeding.

I find that the Applicant caused some delay in these proceedings by her non-attendance at the Examinations Under Oath, and failure to make productions on a timely basis. However, I do not find that the proceeding was improper, vexatious or unnecessary.

I have considered the draft Bill of Costs prepared by TD. In total, eleven individuals worked on this matter including six different lawyers, two students-at-law, and three law clerks. TD is seeking total fees of $38,055.40. The following professionals spent the following corresponding amount of time on this file:

Catherine Korte – 4.2 hours at a rate of $136.43 per hour – total charged $573.00 Domenic Nicassio – 198.3 hours at a rate of $136.43 per hour – total charged $27,054.06 Sabrina Lucibello – 1.2 hours at a rate of $122.78 per hour – total charged $147.33 Garett Harper – 20.6 hours at a rate of $109.14 per hour – total charged $2248.28 Anthony Gatensby – 5.1 hours at a rate of $109.14 per hour – total charged $556.61 Bogdan Miscevic – 60 hours at a rate of $109.14 per hour – total charged $6548.40 Shayan Kamali – 3.4 hours at a rate of $64.74 per hour – total charged $220.11 Taskeen Abdul-Rawoof – 8.5 hours at rate of $64.74 per hour – total charged $550.29 Nataliya Mozhzhukhina - 21.3 hours at a rate of $32.37 per hour – total charged $689.48 Victoria Rodriguez – 5.7 hours at rate of $32.37 per hour – total charged $184.50 Danielle Ralph – 15.10 hours at a rate of $32.37 per hour – total charged $488.78

Mr. Nicassio has tallied the total spent by legal professionals on this matter to be 337.30 hours. By my calculation the time spent according to TD’s Bill of Costs is 343.40 hours.

I find this figure to be excessive with respect to a few items. There seems to be much duplication of efforts regarding certain categories. For example, three different individuals did miscellaneous research: Bogdan Miscevic, Garett Harper and Mr. Nicassio. One category seems to be over-reaching; Drafting, reviewing and revising other reports to client with a total of 13.2 hours allocated to this item. Furthermore, there is a total of 60 hours allocated to drafting, updating and revising materials for arbitration undertaken by five different individuals. 13.5 hours were docketed for cost submissions for the appearance on December 12, 2017. Yet, at that appearance, counsel had failed to utilize the appropriate hourly rates for a FSCO matter. I am concerned about the number of different individuals that worked on this file, and the appearance of duplication of efforts. I find the total of 343.40 hours to be excessive, when considering that ultimately this matter was scheduled for only a four-day hearing. On this basis, I am eliminating all the time spent by the Junior Associates and the Students-at-Law. When their time is eliminated, the total time spent on this file is reduced to 245.80 hours and the total fees sought by Mr. Nicassio are reduced to $27,931.71.

I have reviewed the list of disbursements that totals $10,571.19. I am satisfied that the disbursements are in accordance with the DRPC, and I am prepared to allow them in their entirety.

The financial status of the Applicant is not a factor to be considered. I have no evidence before me with respect to the Applicant’s current financial status.

I am allowing the total fees inclusive of HST in the amount of $31,562.83. I am allowing the disbursements of $10,571.19.

Expenses

Total expenses payable to the Insurer by the Applicant inclusive of fees and disbursements are $42,134.02.

February 28, 2018

Deborah C. Anschell Arbitrator

Date

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:

The Applicant is permitted to withdraw the Application, subject to the expense award.
The Insurer is entitled to its expenses in the amount of $42,134.02.