Ronald Hamilton v. Dominion of Canada General Insurance Company, 2020 ONFSCDRS 6

Dispute Resolution Services Services de résolution des différends

of Ontario de l’Ontario

Neutral Citation: 2020 ONFSCDRS 6

A14-005620

BETWEEN:

RONALD HAMILTON

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Maggy N. Murray

Heard: By telephone conference call on February 13, 2020

Appearances: Samia Alam for Mr. Hamilton

Jeffery Crannie for Dominion of Canada General Insurance Company

Issues:

The Applicant, Ronald Hamilton, was injured in a motor vehicle accident on July 15, 2011. In a decision dated July 17, 2017, Arbitrator Charles Matheson dealt with Mr. Hamilton’s claims for statutory accident benefits under the Schedule¹ arising from the accident on July 15, 2011. Mr. Hamilton was also involved in an accident in 2014, but that was the subject of a different arbitration. The Arbitration hearing was six days. Arbitrator Matheson made the following orders,² while reserving on the issue of expenses:

The Applicant did not sustain a catastrophic impairment as a result of the July 15, 2011 accident.
The Applicant is not entitled to income replacement benefits (IRBs) as a result of the July 15, 2011 accident.
The Applicant is not entitled to receive payments for housekeeping and home maintenance services of $100.00 per week, commencing July 15, 2013 to date, and on-going.
The Applicant is entitled to the total payment of $2,000.00 for the three OCF-18s, dated August 1, 2013, submitted by Dr. Koch. The Applicant is not entitled to $4,834.93 for the cognitive and learning therapy OCF-18, dated September 19, 2012.
The Applicant is entitled to interest for the overdue amount, in accordance with the Schedule for the overdue payment of benefits.

The issue in this further hearing is:

Is Dominion entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Each side shall bear its own expenses of the hearing.

EVIDENCE AND ANALYSIS:

Dominion seeks its arbitration costs for the following:

$20,694.59 Legal fees (counsel and law clerk), inclusive of HST on legal fees (HST = 13%)

$ 3,518.61 Disbursements³ inclusive of HST on the disbursement (HST = 13%)

$24,213.20 TOTAL⁴

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. Those criteria are:

(a) each party's degree of success in the outcome of the proceeding; (b) any written offers to settle made in accordance with Rule 76; (c) whether novel issues are raised in the proceeding; (d) 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; (e) whether 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; and (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.

Rule 76 of the Code states:

76.1 An adjudicator will consider an Offer to Settle in connection with an award of expenses provided that:

(a) it was made in writing, was served on the other parties and contains:

(i) the full terms of the Offer to Settle; (ii) the date when the Offer was served and the time period during which it remained open for acceptance

(b) the Offer was made after the conclusion of mediation and before the conclusion of the hearing, with particular consideration given to any Offer served after the conclusion of the pre-hearing discussion or preliminary conference as the case may be, up to 5 days before the commencement of the hearing (emphasis added).

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.

In Henri,⁵ 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.⁶ I find this consideration particularly applicable in this case.

Legal Fees

Dominion claimed expenses⁷ for the following representatives:

i. Mr. Jeffrey Crannie, who was called to the Ontario bar in 2002 (i.e., a tier 3⁸ lawyer based on the legal aid rates) and conducted the arbitration hearing. Dominion submitted that Mr. Crannie’s total time spent on this appeal was 145.2 hours;

ii. Mr. Logan Schroeder, who was called to the Ontario bar in 2012 (i.e., a tier 2⁹ lawyer based on the legal aid rates). Dominion submitted that Mr. Schroeder’s total time spent on the arbitration was 27.3 hours;

iii. Ms. Cathy Zavitz, a law clerk¹⁰ who billed 15.6 hours;

iv. Ms. Keri Brooks, a law clerk who billed 7.1 hours;

v. Ms. Susan Hampson, a law clerk who billed for 46.7 hours.

The above is a total of 172.5 lawyer hours and 69.4 law clerk hours.

Disbursements

Dominion claimed $3,518.61 in disbursements for photocopies, postage, arbitration conduct money for 11 witnesses and courier fees.

(a) Each Party’s Degree of Success:

The first criterion for an expense award pursuant to Rule 75.2 of the Code is success. According to Dominion, it was the successful party and is entitled to its expenses. Specifically, Arbitrator Matheson found that Mr. Hamilton was not catastrophically impaired, nor was he entitled to IRBs or housekeeping and home maintenance benefits.

However, I note that Arbitrator Matheson found that Mr. Hamilton is entitled to $2,000.00 for three OCF-18s, dated August 1, 2013, submitted by Dr. Koch.

Section 3(2) of the Schedule states:

(2) For the purposes of this Regulation, a catastrophic impairment caused by an accident is,

(e) … an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person (emphasis added); …

Arbitrator Matheson found that Mr. Hamilton had a whole person impairment rating (WPI) of 52%. If Mr. Hamilton’s WPI was 53%, it would have been rounded up to 55%¹¹ and he would have been found to be catastrophically impaired pursuant to the definition of the Schedule. That is, it would have taken only 1% more for Mr. Hamilton to have a catastrophic impairment as defined by s.3(2) of the Schedule.

Although not put in these terms, Mr. Hamilton’s submission was that each party should bear its own expenses¹² because this arbitration was a “close run thing.”¹³

I find that there was divided success at the hearing. Although Dominion was successful on the issue of Mr. Hamilton not being catastrophically impaired, Mr. Hamilton came close, having been found to be 1% away from rounding up the WPI to 55%. This was a serious issue that Mr. Hamilton was reasonable in pursuing at arbitration. Dominion came very close to losing on the issue of catastrophic impairment.

(b) Offers to Settle:

Dominion made three offers to settle Mr. Hamilton’s claims all of which were on a full and final basis (i.e., a settlement of the current issues in dispute as well as any other potential claims that could arise from the July 15, 2011 accident).¹⁴ A full and final settlement is not the same as an offer to settle the issues in dispute. The closure of Mr. Hamilton’s file would deny him the opportunity, if required, to ask for further assistance from Dominion.¹⁵

Although Dominion’s April 24, 2017 Offer to Settle was made more than five days before the hearing, it did not stipulate the period during which it would remain open for acceptance, contrary to Rule 76 of the Code. None of the insurer’s three offers to settle on a full and final basis were offers in accordance with the Code because they were offers to settle all of Mr. Hamilton’s entitlement to all statutory accident benefit on a full and final basiss, which were not being decided in the arbitration. Rather, only discrete issues were in dispute.

The parties agreed that there were no novel issues¹⁶ and I agree.

(d) and (e): The Conduct Of A Party Or A Party's Representative That

Tended To Prolong, Obstruct Or Hinder The Proceeding;

Whether Any Aspect Of The Proceeding Was Improper,

Vexatious Or Unnecessary

According to Dominion the following factors tended to prolong, obstruct or hinder the proceeding and were improper, vexatious or unnecessary:

i. Mr. Hamilton advised a month before the arbitration hearing was scheduled to begin that he wanted to cross-examine all of Dominion’s witnesses at the arbitration hearing, which resulted in Dominion preparing Summons’ to Witness for 15 witnesses. However, only one of Dominion’s witnesses testified at the hearing;¹⁷

ii. Less than a month before the arbitration hearing was scheduled to begin, Mr. Hamilton requested an adjournment of the hearing because he was in a second motor vehicle accident in 2014 and was claiming similar accident benefits as a result of both accidents;¹⁸

iii. An email sent at 9:45 p.m.on April 28, 2017, being the Friday evening prior to the Arbitration starting on Monday, Mr. Hamilton’s lawyer advised that she found out that morning that two of Mr. Hamilton’s doctors were out of the country and not able to attend the Arbitration.¹⁹

I disagree that the above prolonged, obstructed or hindered the proceeding and were improper, vexatious or unnecessary for the following reasons:

i. As counsel prepare for a hearing and the hearing date approaches, counsel will streamline the presentation of their case;

ii. Although the adjournment that Mr. Hamilton requested was denied by Arbitrator Matheson,²⁰ it was not unreasonable for him to request an adjournment of the May 2017 arbitration for reasons that include: (1) Mr. Hamilton commenced arbitrations and was claiming some of the same benefits - catastrophic impairment, IRB’s and medical and rehabilitation benefits – as a result of both the 2011 and the 2014²¹ accidents. Rule 30.1 of the Code states that:

Where two or more Applications for Arbitration have been filed and it appears that:

(a) they have an issue or question of law, fact, or policy in common; or

(b) the application of this Rule will result in the most just, quickest, and least expensive means to deal with the Applications.

The Dispute Resolution Group will notify the parties in writing of the intention to:

(d) schedule the proceedings to be heard at the same time;

(e) schedule one or more proceedings to be heard one immediately after the other by the same arbitrator; or

(f) suspend the scheduling of a proceeding or proceedings until the determination of any one of them.

A situation in which someone involved in two motor vehicle accidents and is claiming the same accident benefits from both insurers is a situation that falls squarely within Rule 30.1 of the Code. Moreover, to have two separate arbitration hearings for the two accidents creates a duplication of evidence and risks inconsistent results.

iii. Regarding Mr. Hamilton’s counsel learning on the Friday before the arbitration that was to start on Monday that two of Mr. Hamilton’s witnesses were out of the country and could not testify at the arbitration hearing, and informing Dominion’s counsel by email Friday evening – that was not an unreasonable amount of time that would meet the criteria contained in (d) and (e).

(f) and (g)

Neither of these criteria are relevant to this proceeding.

Expenses

Mr. Hamilton asked Dominion for a copy of its dockets and accounts to determine the reasonableness of the expenses. However, Dominion did not give Mr. Hamilton its dockets based on privileged communications. Mr. Hamilton then asked for redacted dockets and accounts.²² Dominion did not give Mr. Hamilton its redacted dockets. It undermines the reliability of the Bill of Costs when no time dockets are provided to substantiate the time claimed.²³

The criterion regarding success is “degree of success.” Although Dominion was successful on the issue of catastrophic impairment, if Mr. Hamilton had 1% more of a WPI, he would have been catastrophically impaired within the definition of the Schedule. It was a close case regarding whether Mr. Hamilton was catastrophically impaired. Dominion was also successful on the issues of IRB entitlement, housekeeping and home maintenance and the cognitive and learning therapy outlined in the OCF-18 dated September 19, 2012.

However, Mr. Hamilton was successful on the issue of the three treatment plans dated August 1, 2013.

Having considered the criteria in the Code, outlined above, the complexity of this matter, the time spent, the written submissions of the parties, the supporting documentation filed, for the reasons set out above, I find it appropriate that each side bear its own expenses (inclusive of all fees, disbursements and HST).

April 23, 2020

Arbitrator

Date