Financial Services Commission of Ontario

Neutral Citation: 2018 ONFSCDRS 52

FSCO A14-002521

BETWEEN:

RAQUEL FARIA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

AND

FSCO A14-002522

BETWEEN:

ESTATE OF MARIA MEDEIROS Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

AND

FSCO A14-002523

BETWEEN:

MARIA FARIA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

DECISION ON EXPENSES

Before: Arbitrator Marcel D. Mongeon

Heard: By written submissions completed on December 15, 2017

Appearances: Mr. Joseph Filice, for Applicants Mr. Paul Omeziri, for Insurer

Issues:

The Applicants were injured in a motor vehicle accident on June 13, 2013, and sought accident benefits from Wawanesa Mutual Insurance Company ("Wawanesa"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and the Applicants, through their 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 issue in this Expense Hearing is:

1. What expenses, if any, is either party entitled to in each of the three separate matters?

Result:

1. In the Raquel Faria matter there shall be no expenses payable.

2. In the Maria Faria matter, expenses of $10,681.66 and disbursements of $1,804.38 are awarded to the Insurer (total: $12,486.04) payable forthwith by Maria Faria.

3. In the Maria Medeiros matter, expenses of $4,577.86 and disbursements of $1,715.56 are awarded to the Insurer (total: $6,293.42) payable forthwith by the Estate of Maria Medeiros.

EVIDENCE AND ANALYSIS:

This is related to my Hearing decision dated October 18, 2017 in the above-captioned matters.

There were three related Applicants. The principal Applicant for this analysis was the driver, Maria Faria. She is the mother of Raquel, and a daughter of Maria Medeiros, both of whom were passengers. Raquel is autistic and Maria Medeiros passed away prior to the Hearing in this matter. Maria Faria acted as a litigation representative for both (litigation guardian in the case of Raquel and Estate Trustee in the case of Maria Medeiros).

In all three Applications, the Insurer prevailed. No benefits were awarded to any of the three Applicants.

The parties were unable to agree on entitlement to the expenses of the Hearing and have sought my determination.

The Insurer has submitted Bills of Costs in each of the three matters.

In the case of Raquel, the Insurer seeks expenses of $12,158.94 for time, HST of $1,560.66 and disbursements of $949.64. The time sought includes almost 70 hours for the principal lawyer involved and about 75 hours of law clerk time.

In the case of Maria Faria, the Insurer seeks expenses of $11,495.81 for time, HST of $1,494.46 and disbursements of $1,002.53. The time sought includes almost 70 hours for the principal lawyer involved and about 70 hours of law clerk time.

In the case of Maria Medeiros, the Insurer seeks expenses of $13,339.43 for time, HST of $1,734.13 and disbursements of $3,319.26. The time sought includes almost 85 hours for the principal lawyer involved and about 60 hours of law clerk time. The disbursements in this case include one line item of $2,128.80 for Copies (Outsourced) which makes the disbursements in this matter a significantly different amount than those in the other two files.

The Applicants have submitted that no awards should be made against Raquel nor Maria Medeiros as they are both persons under a disability. In support of this proposition, the arbitral decision of J.C. and State Farm² has been referred to. I also note that that decision clearly turned on a lack of evidence that the representative had agreed to be bound for costs as the representative.

In reply, the Insurer argues that even where an applicant is impecunious, it may be required to pay expenses. I believe that this is an incorrect characterization of the Applicants' submissions. I did not read the Applicants' submissions as suggesting that Maria Faria or the two Applicants she, in turn, represented were impecunious. I agree that the impecuniosity of an applicant is not included in the criteria outlined below.

My recollection and the decision I issued on October 18, 2017 remind me that this was an eight day Hearing. The matter was made difficult for the Applicants when I excluded their document brief because of short-service. Only one of the three Applicants actually testified, the mother having died and the autistic daughter being unable. I accorded no weight to two of the experts testifying for the Applicants for reasons given in my decision. I denied non-earner benefits to the two living Applicants on the basis that a complete inability to carry on a normal life had not been made.

Expenses in an Arbitration Hearing are governed by Regulation 664, R.R.O. 1990, Automobile Insurance made under the Insurance Act, as amended. Section 12 thereof, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, sets out a number of criteria that an arbitrator shall consider in awarding all or part of the expenses of an arbitration proceeding. These criteria are (with some editing):

1. Each party's degree of success in the outcome of the proceeding.
2. Any written offers to settle [...]
3. Whether novel issues are raised in the proceeding.
4. The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding [...]
5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.
6. Whether the insured person refused or failed to submit to an examination [...]

Before I engage in an analysis under these criteria, I need to first consider the Applicants' submissions that since two of the parties are under disability, costs orders can only be made given proof of the fact that there is someone who has agreed to answer for costs.

I deal first with the estate of Maria Medeiros. In this case, the estate in law stands in the person of the deceased person. An order was issued in this action dated October 24, 2016 to this effect.

The estate trustee in turn acts for the estate under whatever liability the estate administration law provides. In this case, I do not need to have proof of the estate's liability; it is established in law. If I make a costs award against the estate, it is my understanding that it is only the estate that will stand responsible for that amount.

With respect to the autistic daughter, I have no submission as to how a substitute decision maker was appointed for her in this proceeding. As a result, I do not know if anyone is legally responsible for her expenses. This is exactly the situation that prevailed in the JC and State Farm case cited above and I will follow that logic with respect to the expenses claim against Raquel only. I hold that no expenses are owing by Raquel or anyone representing her in her claim.

I am, therefore, left with making a determination of what expenses may be owing in the case of Maria Faria and the Estate of Maria Medeiros.

I return to the expense criteria cited above, and I note:

The Insurer prevailed in the two Applications.

No settlement offers were brought to my attention.

There were no novel issues considered by me in the two Applications. I note that a lot of the testimony in the Hearing related to Raquel. I find that, if it were not for the issues involving Raquel, the facts relating to Maria Faria and Maria Medeiros could likely have been dealt with in about four days of hearing with about 70% of that time allocated to the Maria Faria matter and 30% to the Maria Medeiros matter. The percentage allocation is based on the fact that the Maria Faria matter had to deal with a determination of non-earner benefits which was not in issue in the other matter.

On the issue of prolonging, hindering or obstructing, both parties acted in a normal fashion. The need to appoint an estate trustee was required but cannot be ascribed to anyone's fault. This logic also applies to considerations of "improper, vexatious or improper behaviour".

As noted, without issues relating to Raquel, this Hearing for the two Applicants would likely have taken no more than four days in total with a 70/30 allocation between Maria Faria and Maria Medeiros respectively.

Based on the foregoing, the Insurer is entitled to an expense award. However, the expense award will be proportionate recognizing the need to provide it with an indemnity for its time and effort for a four day hearing as between the two Applicants rather than the eight days it actually took.

With respect to the Hearing itself, the Insurer should receive an indemnity for the one lawyer attending the Hearing for four days and six additional preparation days and an equal amount of time for legal clerking. No additional indemnity is provided for there being two separate files.

In setting applicable rates for the representative, I am guided by section 78 of the Dispute Resolution Practice Code. This provides that the legal aid rates should be used for Insurer's counsel. Under the foregoing criteria, I find that the normal legal aid rates are appropriate.

I find that there should be 8 hours per day for 10 days (four hearing days and six preparation days) for the principal lawyer involved in the file for the Insurer ($136.43 per hour): $10,914.40; and 80 hours for a legal clerk (80 x $32.37): $2,589.60 (sub-total: $13,504.00) plus applicable HST ($1,755.52) for a total of $15,259.52.

As already discussed, this amount will be split 70% to Maria Faria ($10,681.66) and 30% to Maria Medeiros ($4,577.86).

I have reviewed the disbursements of the Insurer for Maria Faria of $1,002.53 and for Maria Medeiros of $3,319.26. I believe that the disbursements in the Maria Medeiros matter have been overstated by the item for $2,128.80 referred to above which should be allocated evenly over all three matters. Accordingly, I am decreasing the disbursement in the Maria Medeiros matter by (2/3 times $2,128.80 + 13% HST): $1,603.70 for a revised disbursement amount of $1,715.56 and increasing the Maria Faria disbursements amount by (1/3 times $2,128.80 + 13% HST): $801.85 for a revised disbursement amount of $1,804.38.

EXPENSES:

In the Raquel Faria matter there shall be no expenses payable.

In the Maria Faria matter, expenses of $10,681.66 and disbursements of $1,804.38 are awarded to the Insurer (total: $12,486.04) payable forthwith by Maria Faria.

In the Maria Medeiros matter, expenses of $4,577.86 and disbursements of $1,715.56 are awarded to the Insurer (total: $6,293.42) payable forthwith by the Estate of Maria Medeiros.

March 12, 2018

Marcel D. Mongeon Arbitrator

Date

Financial Services Commission of Ontario

Neutral Citation: 2018 ONFSCDRS 52

FSCO A14-002521

BETWEEN:

RAQUEL FARIA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

AND

FSCO A14-002522

BETWEEN:

ESTATE OF MARIA MEDEIROS Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

AND

FSCO A14-002523

BETWEEN:

MARIA FARIA Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

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:

1. In the Raquel Faria matter there shall be no expenses payable.

2. In the Maria Faria matter, expenses of $10,681.66 and disbursements of $1,804.38 are awarded to the Insurer (total: $12,486.04) payable forthwith by Maria Faria.

3. In the Maria Medeiros matter, expenses of $4,577.86 and disbursements of $1,715.56 are awarded to the Insurer (total: $6,293.42) payable forthwith by the Estate of Maria Medeiros.

March 12, 2018

Marcel D. Mongeon Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2FSCO A15-006454, expenses decision of November 22, 2017, Arbitrator Kim Parrish.