Gurprit Cheema v. TD General Insurance Company, 2019 ONFSCDRS 5

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2019 ONFSCDRS 5

FSCO A09-001294

BETWEEN:

GURPRIT CHEEMA

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Arbitrator Sone

Heard: Final written submissions received on November 9, 2018

Appearances: Linda Wolanski for Mrs. Cheema

Asma Desai and Eric Levin for TD General Insurance Company

Issues:

The Applicant, Gurprit Cheema, was injured in a motor vehicle accident on January 19, 2008. In a decision dated July 9, 2012, Arbitrator Bujold dealt with her claims against TD General Insurance Company (TD General) for statutory accident benefits under the Schedule.¹ Arbitrator Bujold dismissed most of Mrs. Cheema’s claims, while reserving on the issue of expenses. His order stated as follows:

Mrs. Cheema did not sustain an impairment as a result of the accident within the meaning of section 2(1.2)(g) of the Old Regulation.
Mrs. Cheema is not entitled to receive any further payments for weekly caregiver benefits.
Mrs. Cheema is not entitled to receive any further payments for attendant care benefits.
Mrs. Cheema is entitled to payments for housekeeping and home maintenance services at the rate of $100.00 per week from July 1, 2008 to January 19, 2010.
Mrs. Cheema is entitled to receive a medical benefit for $1,040.97 for assistive devices recommended by First Choice Medical Assessments in a treatment plan dated September 9, 2008, less the value of any assistive devices recommended therein that TD General has already provided to Mrs. Cheema.
Mrs. Cheema is not entitled to receive medical benefits for the treatment recommended by Neuro-Rehab Services Inc.
Mrs. Cheema is not entitled to payments for the cost of examinations claimed.
TD General is not liable to pay a special award.
Mrs. Cheema is entitled to interest on overdue benefits.
The issue of expenses is deferred pending an attempt by the parties to resolve the issue between themselves.

Subsequently, Mrs. Cheema brought an Application for Variation/Revocation of the Arbitrator’s original order. Arbitrator Bujold also dismissed this Application, and stated that the parties may apply, within 30 days, to have the expenses of both the Arbitration and the Application for Variation/Revocation determined should they be unable to resolve the issue between themselves.

The issue in this further hearing is:

Is Mrs. Cheema or TD General Mutual Insurance Company entitled to their expenses incurred in respect of this arbitration hearing, and if so, in what amount?

Result:

TD General Mutual Insurance Company is entitled to its expenses in the amount of $27,425.82, inclusive of fees, HST, and disbursements.

EVIDENCE AND ANALYSIS:

Entitlement to Expenses:

Pursuant to subsection 282(11) of the Insurance Act:

The Arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer all or part of such expenses incurred in respect of an Arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

The criteria an adjudicator shall consider when deciding whether to award expenses are found in Ontario Regulation 664², in Rule 75.2 and Section F of the Dispute Resolution Practice Code (Fourth Edition — Updated January 2014). I will discuss each of these criteria in order.

(a) Each party’s degree of success in the outcome of the proceeding:

TD General was almost entirely successful in the hearing, and was entirely successful in the Application for Variation/Revocation. Mrs. Cheema was successful in her claims for payments for housekeeping and home maintenance services at the rate of $100 per week from July 1, 2008 to January 19, 2010, a medical benefit for $1,040.97 for assistive devices and interest on overdue benefits. This came to a total of $9,l15.26 plus interest.

(b) Any written offers to settle made in accordance with Rule 76:

TD General made two written offers to settle in this proceeding.

On June 8, 2011, TD General made a settlement offer of $60,000, in addition to $5,000 for costs and disbursements. This offer was open until June 13, 2011, which was the first day of the arbitration hearing before Arbitrator Bujold. Mrs. Cheema did not accept this offer. Her success at the hearing fell far below what was offered.

TD General made a second settlement offer on August 7, 2012, after Arbitrator Bujold’s decision was released. The offer was that each party bear its own expenses in connection with the arbitration hearing. The next day TD General received Mrs. Cheema’s Application for Variation /Revocation of Arbitrator Bujold’s order. At that time, TD General withdrew this Offer to Settle.

Four years later on November 23, 2016, Mrs. Cheema asked that each party bear their own costs. This was after she had also lost her Application for Variation/Revocation of Arbitrator Bujold’s order.

Mrs. Cheema submits that since the offer was made on one day and withdrawn on the next, there was no opportunity for her to deal with it. For example, her counsel was out of town on the day it was received, and her counsel would have had to bring in an interpreter to explain the offer to her. In other words, there was a lack of procedural fairness, as required by administrative law,

TD General submits that since Mrs. Cheema had already applied for Variation/Revocation of the Application before she saw TD General’s offer, she demonstrated that she had no appetite for settlement.

Since Mrs. Cheema did not have the possibility of fully considering TD General’s second offer to settle, I am not taking it into consideration in this decision regarding entitlement to expenses.

Neither party suggested that novel issues were raised in the proceeding. I find that there were no novel issues raised in the Arbitration or Application for Variation/Revocation.

(d) 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:

TD General alleges that Mrs. Cheema made little effort to obtain the relevant documentation that was required for the Application for Variation/Revocation. Mrs. Cheema submits that she made significant efforts to obtain the documentation requested by TD General. After making numerous requests for the documentation, Mrs. Cheema was required to bring a motion and obtain an order against a third party, in order to obtain this documentation. Under these circumstances, I find that Mrs. Cheema’s conduct did not prolong, obstruct or hinder the proceeding.

(e) Whether any aspect of the proceeding was improper, vexatious or unnecessary:

Neither TD General nor Mrs. Cheema submitted that any aspect of the proceeding was improper, vexatious or unnecessary.

(f) Whether the insured person refused or failed to submit to an examination as required under section 42 of 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.

Not applicable to this proceeding.

(g) 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.

Not applicable to this proceeding.

Based on the outcome that TD General was almost entirely successful in the Arbitration hearing and entirely successful in the Application for Variation/Revocation, I find that TD General is entitled to its expenses of this proceeding. As degree of success is the most important criterion in this case, I place the most weight on it. I also not that Mrs. Cheema did not accept TD General’s settlement offer of $60,000, in addition to $5,000 for costs and disbursements. This far exceeded her success at the Arbitration.

Amount of Expenses:

Statutory Framework:

The amount of expenses I may award is set out in section 3 of the Schedule to the Expense Regulation (Dispute Resolution Expenses) pursuant to subsection 282(11) of the Insurance Act. It states as follows:

3(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:

For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.

(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of this Regulation.

(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission or the Financial Services Commission of Ontario, as it may be amended from time to time.

Insurer’s Claim for Expenses:

In a Bill of Costs, at Legal Aid rates, TD General claimed $51,059.71 for fees and $6,637.76 for H.S.T. It also claimed $40,867.25 for disbursements.

Analysis and Findings:

The overriding consideration in fixing arbitration expenses for legal fees is reasonableness.

Mrs. Cheema submitted that each party should bear their own expenses, or alternatively, TD General’s claims for expenses were excessive, and, should I decide to award expenses, they should be considerably reduced. She submitted that in correspondence dated November 23, 2016, she agreed with TD General’s offer of August 7, 2012 (over four years later) that each party bear its own costs. On November 24, 2016, TD General advised that it would no longer agree to waive its costs of the Arbitration and Application for Variation/Revocation.

Mrs. Cheema also submitted that she did not have the capacity to pay expenses. The alleged financial position of Mrs. Cheema is not a permitted criterion under the Dispute Resolution Expenses Regulation. Therefore I do not find it is a relevant consideration in this case.³

The Arbitration in this matter was heard on June 13, 14, 15, 16, October 3, 4, 5, 6 and December 2, 2011. There was 56 hours of hearing time. The Application for Variation/Revocation took place on November 26, 2015, by telephone conference call. It lasted approximately two hours.

Fees:

In terms of the hearing time, Arbitrator Makepeace confirmed in Henri and Allstate Insurance Company of Canada⁴, that “a line-by-line assessment of the expenses claimed is not appropriate. Rather, the Arbitrator should make a global assessment of reasonable expenses.”

As a rule of thumb, Arbitrators have allowed expenses for preparation for hearing time to the actual hearing time on a ratio of between 1:1 and 1:4.

Due to the mixed success of the parties, I find that 2:1 is an appropriate ratio here.

The Arbitration hearing and Application for Variation/Revocation hearing together took 58 hours of hearing time. Accordingly, I allow 116 hours for preparation time. I find that TD General is entitled to a total of 174 hours for preparation and hearing time.

TD General had a number of counsel representing it; however the majority of the work was done by Mr. Petros Yannakis, at the Legal Aid rate of $89.79 per hour. Accordingly, I find that TD General is entitled to $17,654.50, inclusive of H.S.T., for its fees in this case.

Disbursements:

TD General claims $40,867.25 for its disbursements. Mrs. Cheema objects to reimbursement claimed for the preparation and attendance of more than two expert witnesses at the hearing. However, during the hearing, Mrs. Cheema did not object to the number of experts TD General called. In addition, there were multiple issues in dispute, including a claim of catastrophic impairment, and Arbitrator Bujold relied on these experts. Therefore, I find that TD General is entitled to its expenses for these experts, in accordance with the Dispute Resolution Expenses Regulation.

Under subsection 5(3) of the Dispute Resolution Expenses Regulation, the maximum amount that may be awarded for the attendance of an expert witness is $200 per hour of attendance up to a maximum of $1,600 per day.

Under subsection 5(4) of the same Regulation, $500 is the maximum amount that may be awarded for preparation for a hearing of an expert witness at which this witness testifies.

In his decision, Arbitrator Bujold relied on the expert testimony of Ms. V. Tandon, occupational therapist. Accordingly, I find that $192.14 she charged for preparation time, and $336.25 she charged for 3.5 hours of testimony to be reasonable. I do not allow the time she charged for travel time or for a phone consultation.

Dr. D. F. Prior, orthopaedic surgeon, testified on behalf of TD General. He invoiced TD General for $3,033.45. He testified for under two hours. I allow $500 for his preparation, and $350 for his attendance at the hearing.

Dr. Robert B. Hines, psychiatrist, testified on behalf of TD General. He invoiced TD General for $4,462.50. He testified for 4.5 hours. I allow $500 for his preparation and $900 for his attendance at the hearing.

Dr. Zielinsky, psychiatrist, testified on behalf of TD General. He invoiced TD General for $3,000. He testified for 2.5 hours. I allow $500 for his preparation time, and $500 for his attendance at the hearing.

Dr. Rehan Dost, neurologist, testified on behalf of TD General. He invoiced TD General for $15,000. He did not provide any breakdown of this amount. He testified for two hours. I allow $500 for his preparation, and $400 for his attendance at the hearing.

Dr. A. Cancelliere, neuropsychologist, was cross-examined by Mrs. Cheema. Mrs. Cheema agreed that the amount claimed for his preparation and attendance was reasonable, and I therefore allow $1,657.50 for that. I do not allow the amounts he claimed for his parking and mileage.

The Dispute Resolution Expenses Regulation does not allow for the costs of a court reporter. As a result I do not allow these disbursements. In addition, I am not allowing conduct money for witnesses who were not called, such as people who conducted surveillance, or for experts whose preparation and attendance time are otherwise covered.

I find that the remaining disbursements are payable. Therefore, I find that a total of $11,597.64 in disbursements are payable to TD General.

Conclusion:

For the reasons set out above, I order Mrs. Cheema to pay to TD General in respect of the Arbitration proceeding, and the Application for Variation/Revocation proceeding, its expenses fixed at $27,425.82, inclusive of fees, H.S.T., and disbursements.

February 8, 2019

Anne Sone

Arbitrator

Date