Mark Bakir v. Dominion of Canada General Insurance Company, 2018 ONFSCDRS 89

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2018 ONFSCDRS 89

FSCO A12-002657

BETWEEN:

MARK BAKIR

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Arbitrator Jeff Musson

Heard:

By written submissions completed March 15 and 22, 2018

Appearances:

Ms. Samia Alam and Mr. Matthew Cino for Mr. Mark Bakir

Ms. Lisa Pool for Dominion of Canada General Insurance Company

Issues:

The Applicant, Mr. Mark Bakir (the “Applicant”), was injured in a motor vehicle accident on September 22, 2011 in Ontario. He applied for statutory accident benefits from Dominion of Canada General Insurance Company (the “Insurer”), payable under the SABS.¹ The parties were unable to resolve their disputes through mediation and the Applicant, 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.

I conducted the Hearing for the issues in dispute on July 10, August 1, 2, 29-31, November 15-17 and December 21, 2017. I issued my written decision with reasons dismissing the Applicant’s claim for post-104 income replacement benefits as well as the Applicant’s claim for interest on outstanding benefits. I approved the Applicant’s claims for pre- 104 income replacement benefits, attendant care benefits from October 26, 2011 until September 25, 2012 as well as housekeeping and home maintenance from September 22, 2011 to date and ongoing. In my decision I also accepted the evidence of the Applicant and dismissed the Insurer’s preliminary issue pursuant to section 31 of the SABS. On the issue of expenses, I ruled that since the parties made no submissions on expenses, if they are unable to agree on the legal expenses of this case, an Expense Hearing shall be requested within 30 days of the date of my decision in accordance with Rule 79 of the Dispute Resolution Practice Code (“DRPC”). The Applicant subsequently requested an Expense Hearing.

The issue in this Expense Hearing is:

What is the quantum that the Insurer is liable to pay with regards to the Applicant's expenses in respect of the Arbitration proceeding under section 282(11) of the Insurance Act?

Result:

The Insurer is liable to pay to the Applicant his expenses in respect of the Arbitration proceeding, fixed in the amount of $54,250.27 (inclusive of fees, disbursements and HST).

EVIDENCE AND ANALYSIS:

Introduction

The Applicant is claiming expenses in the total amount of $72,674.15, including HST, comprised of $67,677.65 including HST and $4,996.50 in disbursements. The Insurer took a different position with respect to expenses in its written submission. It submits that the Insurer is entitled to $16,862.42 including HST for its expenses. This amount is comprised of $16,187.42 including HST and $675.00 in disbursements. In the alternative, the Insurer takes the position that both parties should bear their own expenses since it was, in the Insurer’s opinion, a split decision.

Rule 79.1 of the DRPC states that where an arbitrator has determined all issues in dispute except expenses, and the parties cannot agree on entitlement or amount of expenses, either party may request, in writing, an Expense Hearing within 30 days from the date of the decision on all other issues in dispute. My jurisdiction to conduct an Expense Hearing is set out in subsection 282(11) of the Insurance Act.²

In addition, an arbitrator shall, under Rule 75.2 of the DRPC, consider only the following seven 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 Rule 76.
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 the 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; and
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 Applicant didn’t comment directly on all 7 sections, however, the Insurer did comment on those sections which were applicable. The Insurer stated that it concedes sections 2, 3 and 6 do not apply in this Expense Hearing and instead focused on sections 1, 4, 5 and 7. Because the Applicant did not comment on sections 2, 3 and 6 in his written submissions, I am taking this omission as the Applicant agreeing that these sections do not apply.

Entitlement to Expenses

Degree of Success

In his submissions, the Applicant states that he was mostly successful when looking at the totality of the issues in dispute that he claimed. In addition, he submits that he was successful with the most important issue in dispute, which was the Insurer’s claim of a preliminary issue pursuant to section 31 of the SABS, which the Applicant successfully defended.

The Insurer submits that the degree of success throughout the proceeding was divided. It states that the Applicant was unsuccessful in relation to the motions to adjourn the Hearing, for his lawyers be removed as lawyers of record and for a declaration that he was incompetent to give evidence at the Hearing. The Insurer further states that in regards to benefits in dispute, the Applicant was found to be entitled to each of the benefits claimed, but not for the length of time claimed or for the amounts claimed except for the housekeeping and home maintenance benefits. The Insurer states in its submissions that it was successful in limiting both the amount and duration of the attendant care benefits as well as both the amount and duration of the income replacement benefits. In addition, the Applicant was not successful on his claim for interest on past benefits.

The Conduct of a Party or Party’s Representative that Tended to Prolong, Obstruct or Hinder the Proceeding, Including a Failure to Comply with Undertakings and Orders

The Applicant states that it was the Insurer’s conduct that caused a lengthening of the Hearing. This was a direct result of the Insurer’s preliminary issue pursuant to section 31 of the SABS, which the Insurer was ultimately denied.

In the Insurer’s submissions, it states that its actions did not lengthen the Hearing and, in fact, shortened it because it relied on documentary evidence rather than viva voce evidence. The Insurer submits that the Applicant delayed the Hearing because of the sheer number of tactical motions that they brought before this Tribunal. Further, the Applicant failed to comply with many of the orders and production requests set out in the Pre-Hearing Letter dated August 5, 2014. It was only on April 14, 2017 that the Insurer stated that someone from the office of counsel for the Applicant provided some, but not all, of the requested information but no explanation as to why these documents had not been provided sooner. The Insurer states that the information that the Applicant failed to provide greatly hindered the Insurer’s ability to fully defend this claim, particularly with respect to the section 31 issue.

As an example of the Applicant’s conduct which prolonged the Hearing, the Insurer submitted the following:

Mr. Paul Barrafato, the lawyer named as legal representative on all the Applicant’s materials and filings prior to the start of the hearing, gave evidence at the hearing on the motion to determine whether the Applicant was competent to give evidence. Mr. Barrafato confirmed that despite receiving a report in March 2017 that in his opinion questioned his client’s competency to both instruct counsel and to give evidence, his office did nothing recommended in that report until the last week of June 2017 when they asked to adjourn the hearing.³

The Insurer also states that the Applicant’s own conduct both caused a delay in starting the Hearing and added length to the Hearing. Ultimately, the Insurer takes the position that it defended this claim in an efficient manner and the Applicant failed to do the same.

Whether any Aspect of the Proceeding was Improper, Vexatious or Unnecessary

In his submissions, the Applicant reiterated that the Insurer’s claim for a section 31 preliminary issue was unnecessary. In his opinion as was stated above, this was improper and ultimately his position is confirmed by my decision in denying the Insurer’s preliminary issue.

The Insurer takes that position that the Applicant and his counsel were not vexatious or discourteous in any manner except for the Applicant's failure to attend the first day of the Hearing. The Insurer further states that the Applicant’s repeated attempts to adjourn the arbitration were improper and unnecessary.

The Insured Person Refused or Failed to Submit to an Examination

The Applicant failed to provide commentary on this section, however, the Insurer did with its submissions. The Insurer states that the Applicant refused to attend Insurer’s Examinations on multiple occasions, specifically in April of 2012 and September of 2014. The Applicant has never provided an explanation as to why he failed to attend. The Insurer also states that throughout the life of this file, the Applicant failed to provide information requested by the Insurer pursuant to section 33, which would have assisted the Insurer to adjust the Applicant’s file. Again, the Insurer states that the Applicant did not have any explanation as to why he did not comply with those requests. In the end, any further information that was given to the Insurer was not done until shortly before the Hearing commenced or while the Hearing was ongoing.

Conclusion

The objective of this Expense Hearing is to determine an appropriate amount to be awarded from the unsuccessful party to the successful party. Based on the evidence presented and the guidance provided by the DRPC, neither party’s position in their written submissions are reasonable nor just.

The Applicant was not 100% successful in proving his case. The Insurer is correct when it states that, for the most part, the benefits that the Applicant was awarded were for a reduced time frame and in the case of post-104 income replacement benefits and interest on all outstanding benefits, were not awarded at all. After reviewing the written submissions of both parties, I am of the opinion that when compared to the Insurer’s success at the Hearing, the Applicant was successful on more issues. Therefore, I have determined that the Applicant is entitled to his expenses and not the Insurer from this Arbitration proceeding; however, in applying the principle of fairness, the amount that the Applicant is claiming in terms of expenses will be reduced.

Assessment of Fees and Disbursement Expenses

This was not an overly complex case, but at the same time it was not a simple case either due to differences of opinions between the parties. The onus was on the Insurer to prove that the Applicant’s claim would be found to be contrary to section 31 of the SABS. For the remaining issues, the onus shifted to the Applicant to prove his entitlement to benefits. The Applicant submitted a lengthy fee breakdown of expenses related to the Hearing. There were three representatives who worked a combined 120.19 hours of hearing time. I agree with the Applicant’s concession that the expenses would focus on the two lawyers assigned to this case as opposed to all three legal professionals retained by the Applicant.

Applicant’s counsel submitted the hours worked on this file. Both of the Applicant’s lawyers accumulated approximately 76 hours of hearing time and when applying a 4:1 ratio of preparation time to hearing time, as determined appropriate in other cases, the total for the Applicant’s lawyers came to 380 hours worked on this case. I find these hours to be within a normal range which one would expect of a case such as this.

The Applicant used a rate of $150 per lawyer. I have determined that this amount should be reduced as per the legal aid rate of $122.78 (Tier 2) for Ms. Alam and $109.14 (Tier 1) for Mr. Cino, based on their respective years of call to the bar. Therefore, Ms. Alam’s fees based on 31 hours of hearing time should be 124 hours of prep time for a total of 155 hours at $122.78 = $19,030.90 + HST = $21,504.92. Mr. Cino’s fees based on 45 hours of hearing time should be 180 hours of prep time for a total of 225 hours at $109.14 = $24,556.50 + HST = $27,748.85. The total fees that the Applicant is entitled to including HST are $49,253.77.

The Applicant submitted disbursements of $4,996.50. In reviewing the list, I have found that all of the disbursements claimed were reasonable.

EXPENSES:

After considering the complexity of this Arbitration Hearing, the written submissions of the parties, the supporting documentation filed, and applying the principle of fairness as guidance, I find it appropriate to fix the Applicant’s expenses at $54,250.27 (inclusive of fees, disbursements and HST).

April 30, 2018

Jeff Musson

Arbitrator

Date