Ronald Hamilton v. Dominion of Canada General Insurance Company, 2019 ONFSCDRS 23

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2019 ONFSCDRS 23

Appeal P17-00057

OFFICE OF THE DIRECTOR OF ARBITRATIONS

RONALD HAMILTON Appellant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY Respondent

BEFORE: Maggy Murray

REPRESENTATIVES: Samia Alam for Mr. Hamilton Jeffery Crannie for Dominion of Canada General Insurance Company

HEARING DATE: On the record by written submissions completed March 11, 2019

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. Ronald Hamilton shall pay Dominion Of Canada General Insurance Company its legal expenses of the appeal proceedings herein, fixed in the amount of $4,000.00, inclusive of disbursements and HST.

May 9, 2019

Maggy Murray Director’s Delegate

Date

I. NATURE OF THE APPEAL

In a decision dated October 9, 2018, I dismissed the appeal of the July 17, 2017 decision of Arbitrator Musson wherein he dismissed Mr. Hamilton's claims and found that Mr. Hamilton was not catastrophically impaired, nor was he entitled to income replacement benefits (IRBs) or post-104 week housekeeping and home maintenance benefits under the Schedule-2010.¹

Dominion now seeks its appeal costs for the following:

$12,811.70 legal fees $ 1,665.52 HST on legal fees (HST = 13%) $ 4,156.03 in disbursements $ 108.77 in HST on the disbursement (HST = 13%) $18,742.02 TOTAL²

II. BACKGROUND AND ANALYSIS

Rule 75.2 of the Dispute Resolution Practice Code – Fourth Edition (the Code) contains the criteria for determining entitlement to expenses that are:

1. Each party's degree of success in the outcome of the proceeding.
2. Any written offers to settle made in accordance with subsection (3).
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, including a failure to comply with undertakings and orders.
5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.

In 2010, the average appeal expenses awarded to insurers was $2,800.³ Despite this, Dominion claims legal expenses and disbursements in the amount of $18,742.02.

In Henri,⁴ Arbitrator Makepeace stated that "[t]he overriding consideration in fixing arbitration expenses is reasonableness." A line-by-line assessment of the expenses claimed is not appropriate. Instead, a global assessment of reasonable expenses should be made. The award of costs should not be so high as to deter an Applicant from accessing the dispute resolution process at FSCO, nor should it penalize him for doing so. In addition to a costs award being reasonable, it must also be fair.⁵

Rule 78 of the Code states:

78.1 The maximum amount that may be awarded to … an insurer for legal fees, is an amount calculated using: (a) the hourly rates established under the Legal Aid Services Act, 1998 for professional services in civil matters before the Ontario Superior Court of Justice;

78.2 The maximum amount that may be awarded to an insured person or an insurer for agent’s fees is an amount calculated using the hourly rates established under the Legal Aid Services Act, 1998 for law clerks, articling students and investigators.

Success

The first criterion for an expense award pursuant to Rule 75.2 of the Code is success. According to Dominion, since it was the successful party on appeal, it is entitled to its expenses. According to Mr. Hamilton, each party should bear its own expenses.⁶

Offers to Settle

The parties did not provide details regarding Offers to Settle.

Novel Issues

The parties agreed that there were no novel issues.⁷

The Conduct Of A Party Or A Party's Representative That Tended To Prolong, Obstruct Or Hinder The Proceeding

The parties agreed that Mr. Hamilton’s conduct did not prolong, obstruct or hinder the appeal.⁸

Whether Any Aspect Of The Proceeding Was Improper, Vexatious Or Unnecessary

Dominion submitted that the appeal was not improper or vexatious, but was unnecessary.⁹ According to Mr. Hamilton, the appeal was not improper, vexatious or unnecessary.¹⁰ Specifically, the Arbitrator found that Mr. Hamilton had a Whole Person Impairment (WPI) rating of 52%. If the Arbitrator found that Mr. Hamilton had a WPI of 55% or more, he would have been catastrophically impaired.¹¹

Legal Fees

Dominion claimed expenses for the following representatives:

i. Mr. Jeffrey Crannie, who was called to the Ontario bar in 2002 (i.e., a tier 3 lawyer based on the legal aid rates) and conducted both the arbitration hearing and appeal hearing. Dominion submitted that Mr. Crannie’s total time spent on this appeal was 41.1 hours;

ii. Mr. Logan Schroeder, who was called to the Ontario bar in 2012 (i.e., a tier 2 lawyer based on the legal aid rates). Dominion submitted that Mr. Schroeder’s total time spent on this appeal was 60.1 hours;

iii. Ms. Cathy Zavitz, a law clerk who billed .2 hours;

iv. Ms. Keri Brooks, a law clerk who billed 2.3 hours;

v. Ms. Susan Hampson, a law clerk who billed for .2 hours.

Dominion also claimed an hourly rate of $150 per hour for Mr. Crannie’s legal fees. However, because Mr. Crannie represents an insurer rather than an insured person, the Code¹² limits the hourly rate that is payable for his work to $136.43 per hour.

The above is a total of 101.2 lawyer hours and 2.7 law clerk hours. The lawyer fees are excessive because the appeal was not complex.

Disbursements

Dominion claimed $2,819.35 for half the cost of the transcript. Director’s Delegate Evans has previously found that the cost of transcripts is not a recoverable appeal expense.¹³ Although there was one reference to the transcript in the appeal decision, it was a minor point. In this case, there was no need to order the transcript.

In addition, Dominion’s list of disbursements is nebulous. For example, Dominion claimed photocopying charges of $746.50 + HST but did not provide the amount charged per page or the number of pages that were photocopied.

Expenses

I find that $4,000.00 inclusive of HST and disbursements, is both fair and reasonable.

Mr. Hamilton shall pay to Dominion Canada Inc. its legal appeal expenses of $4,000.00 inclusive of HST and disbursements.

May 9, 2019

Maggy Murray Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended (the Schedule).
2. 2Dominion’s Written Submissions on costs, at tab 2
3. 3Bains v. RBC General Insurance Co., Westlaw at para. 22 (FSCO, P09-00005, September 8, 2010)
4. 4Henri v. Allstate Insurance Co. of Canada (OIC A-007954, August 8, 1997)
5. 5Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, Westlaw at para. 24 (Ont. C.A.), as cited in Ibrahim v. Kadhim (2007), 2007 CanLII 37228 (ON SC), 160 A.C.W.S. (3d) 229, 86 O.R. (3d) 728, Westlaw at para. 9 (Ont. S.C.J.), as cited in Malik v. Economical Mutual Insurance Co., Westlaw at para. 20 (FSCO, A07-001978, June 26, 2009)
6. 6Mr. Hamilton’s Written Costs Submissions, para. 9
7. 7Dominion’s Written Costs Submissions, para. 7; Mr. Hamilton’s Written Costs Submissions, para. 15
8. 8Dominion’s Written Costs Submissions, para. 10; Mr. Hamilton’s Written Costs Submissions, para. 15
9. 9Dominion’s Written Costs Submissions, para. 11
10. 10Mr. Hamilton’s Written Costs Submissions, para. 15
11. 11Schedule, s. 3(2)(e)
12. 12Rule 78
13. 13Bharat and State Farm Mutual Automobile Insurance Co., at p. 3 (FSCO, P17-00047, P17-00048, March 7, 2019; Pereira v. Kingsway General Insurance Co., Westlaw at para.’s 14-16 (FSCO P05-00031, September 17, 2007)