Wawanesa Mutual Insurance Company v. Ibrahim Yakubu, 2019 ONFSCDRS 24

Financial Services Commission of Ontario

Commission des services financiers de l'Ontario

Neutral Citation: 2019 ONFSCDRS 24

Appeal P18-00019

OFFICE OF THE DIRECTOR OF ARBITRATIONS

WAWANESA MUTUAL INSURANCE COMPANY Appellant

and

IBRAHIM YAKUBU Respondent

BEFORE: Maggy Murray

REPRESENTATIVES: Paul Omeziri for Wawanesa Mutual Insurance Company Savannah Chorney for Mr. Yakubu

HEARING DATE: On the record

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 March 14, 2018 is affirmed.

2. Before the appeal, the parties agreed that the successful party to the appeal would be entitled to $3,000.00 inclusive of disbursements and HST. Wawanesa Mutual Insurance Company shall pay Mr. Yakubu his legal expenses of the appeal proceedings herein, in the amount of $3,000.00, inclusive of legal expenses, disbursements and HST.

May 14, 2019

Maggy Murray Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Wawanesa appeals the arbitration expenses order of Arbitrator Mills dated March 14, 2018, wherein she assessed a total of $46,918.59 for fees, disbursements and HST against Wawanesa.

However, the appeal submissions largely turn on the Arbitrator's findings of facts and exercise of discretion. These are not subject to review, and Wawanesa has not identified any areas where the Arbitrator's decision was legally incorrect. Therefore, I have no basis to intervene.

This matter involves the Schedule.¹

II. BACKGROUND

Mr. Babs Ibrahim Yakubu was injured in a motor vehicle accident on May 21, 2015 and sought accident benefits from Wawanesa Mutual Insurance Company ("Wawanesa"), payable under the Schedule. A six day Arbitration was conducted between June and August 2017. In a decision dated October 19, 2017, the Arbitrator awarded Mr. Yakubu an income replacement benefit (IRB) of $400.00 per week from May 17, 2016 to May 21, 2017, transportation expenses, $15,063.41 for physiotherapy and interest.

In a subsequent decision dated March 14, 2018, Arbitrator Mills awarded Mr. Yakubu $46,918.59 in legal costs. Wawanesa made two written offers to settle for $2,500.00 and $5,000.00 in June, 2017 on an all-inclusive full and final basis. However, the Arbitrator found that Wawanesa's offers to settle were not made in accordance with Rule 76 of the Dispute Resolution Practice Code – Fourth Edition (the Code). Having regard to Mr. Yakubu's success at the first Arbitration hearing, which removed Mr. Yakubu from the Minor Injury Guideline, Arbitrator Mills did not consider Wawanesa's offers to settle to be reasonable.

III. ANALYSIS

The Divisional Court stated in Clancy v. Aviva Canada Incorporated, "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."²

As well, the Divisional Court stated in Belair Direct Insurance Company v. Green,³ that the "palpable and overriding error" standard does not apply to appeals at FSCO, since Director's delegates cannot review errors of fact by re-weighing the evidence.

In light of these principles, I dismiss Wawanesa's submissions because they focus on the Arbitrator's findings of facts or exercise of discretion.

For example, according to Wawanesa, the "Arbitrator only considered the Applicant's degree of success in the proceeding. There was no consideration of the fact that the Insurer was also successful with respect to certain claims."⁴ I disagree.

The Arbitrator stated:

The issues in dispute were income replacement benefits, medical benefits, transportation expenses, the cost of examinations and a special award. Arbitrator Gueller found that the Applicant was entitled to income replacement benefits from May 2016 to May 2017, he was entitled to the medical benefits claimed and he was entitled to the transportation expenses claimed. He was not entitled to income replacement benefits post May 2017 nor was he entitled to the cost of an examination, or a special award. He was awarded interest on the benefits outstanding. Having regard to Arbitrator Gueller's decision, I am in agreement with the Applicant and consider him to have been significantly successful in the proceeding (emphasis added).⁵

The Arbitrator was aware of the fact that Mr. Yakubu's claim for IRB's after May 2017 did not succeed and was not entitled to the cost of an examination expense or a special award. The Arbitrator weighed each party's degree of success and concluded that Mr. Yakubu was "significantly successful."⁶ The Arbitrator also considered Mr. Yakubu's "degree of success,"⁷ as is required under Rule 75.2 of the Code.

Wawanesa submits on appeal that the Arbitrator "failed to consider whether factors such as the Applicant's improper conduct during the hearing and the dismissal of a number of the Applicant's claims should warrant an adjustment of the expense award."⁸ I disagree. The Arbitrator considered the conduct of each party and stated:

The Insurer submits that the Applicant's conduct prolonged the proceeding. Specifically, the Applicant did so by making a claim for attendant care benefits that was later withdrawn, making a claim for duplicate medical benefits which was later withdrawn, claiming for cost of examinations despite not having filed the treatment plan, at the Hearing, bringing a motion for file materials unnecessarily and bringing a motion to call five expert witnesses at the Hearing despite the directive of the DRPC. The Applicant submits that the conduct of the Insurer's representative unnecessarily prolonged the Hearing. The Insurer made repeated, unnecessary and improper objections to evidence and throughout examination-in-chief and cross-examination, which necessitated a further day be scheduled for closing submissions. Further, the Insurer's representative continued with his argumentative and improper conduct throughout the Applicant's closing submissions.

I am mindful that Arbitrator Gueller's decision does not reflect either the position of the Applicant or the Insurer. I am also mindful that no party has produced a transcript of the proceedings for my consideration. The Applicant withdrew the request for attendant care benefits at the direction of Arbitrator Gueller on the first day of the Hearing. However, I note that he had indicated his intention to do so on a no-cost basis prior to the Hearing commencing. Further, I accept that the duplicate accounts were an oversight which was corrected without prejudice to the Insurer. I also note that on July 24, 2017, the second day of the Hearing, the Insurer brought a motion for costs because of the withdrawal of the attendant care benefits, which Arbitrator Gueller dismissed. Arguably, that motion would have had the effect of prolonging the Hearing, as did other motions brought by each side. In my view, based on the evidence before me, the proper determination regarding this criterion is that both sides must bear the burden of the Hearing having been prolonged.⁹

According to Wawanesa, the Arbitrator failed to consider "what quantum of expenses was appropriate" and should have used a "ballpark" method.¹⁰ I disagree. The Arbitrator determined that:

The overriding consideration in determining quantum is reasonableness. The appropriate approach is to look at the ratio of preparation time to the attendance at a hearing.

When assessing expenses Arbitrators at this tribunal have found that an appropriate approach is a ratio of preparation time to attendance at an arbitration hearing of between 4:1 and 1:1.¹¹ In this case, the Arbitrator used a ratio of preparation time to hearing time of 3:1. The Arbitrator also denied expenses for a second counsel based on the complexity of the case and the absence of novel issues.

In conclusion, I find that Arbitrator Mills made findings on the issues and evidence before her and exercised her discretion appropriately. I find no error of law. Accordingly, the appeal is dismissed and the order of Arbitrator Mills is affirmed.

IV. EXPENSES

Before the appeal, the parties agreed that the successful party to the appeal would be entitled to $3,000.00 inclusive of disbursements and HST. Wawanesa Mutual Insurance Company shall pay Mr. Yakubu his legal expenses of the appeal proceedings herein, in the amount of $3,000.00, inclusive of legal expenses, disbursements and HST.

May 14, 2019

Maggy Murray Director's Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2(2018), 298 A.C.W.S. (3d) 27, Westlaw at para. 22
3. 3(2018), 2018 ONSC 2782, 292 A.C.W.S. (3d) 853, 80 C.C.L.I. (5th) 44, Westlaw at para. 24
4. 4Wawanesa's Written Submissions, para. 9
5. 5Yakubu and Wawanesa Mutual Insurance Co., Westlaw at para. 10 (FSCO, A16-001336, March 14, 2018)
6. 6Yakubu, Westlaw at para.'s 10 and 15
7. 7Yakubu, Westlaw at para.'s 16 and 18
8. 8Wawanesa's Written Submissions, para.'s 19 and 21(b)
9. 9Yakubu, Westlaw at para.'s 12 and 13
10. 10Wawanesa's Written Submissions, para.'s 18 and 20
11. 11Salva v. Allstate Insurance Co. of Canada (FSCO, FSCO A05-002958, FSCO A06-000004, July 30, 2007); Gogna v. State Farm Mutual Automobile Insurance Co. (FSCO A08-001134, June 28, 2011); Kennedy v. Traders General Insurance Co. (FSCO A02-001715, October 22, 2004)