H. A-R v. Aviva Insurance, 2017 CanLII 76929

Licence Appeal Tribunal

Date: 2017-11-01

Tribunal File Number: 16-003039/AABS

Case Name: 16-003039 v Aviva Insurance

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

H. A-R Applicant

and

Aviva Insurance Respondent

DECISION ON COSTS

AJUDICATOR: Robert Watt

APPEARANCES:

For the Applicant: Jessie v. Tran, counsel For the Respondent: Nabila Majidzadeh, counsel

Heard In-writing: July 17, 2017

OVERVIEW

1The applicant was injured in an automobile accident on February 16, 2014, and sought benefits pursuant to the Statutory Accident Benefits Schedule-effective September 1, 2010 (the "Schedule").

2The applicant submitted an application for dispute resolution services to the Licence Appeal Tribunal-Automobile Accident Benefits Service (the "Tribunal")

3A case conference was scheduled for June 6, 2016, at 9:00 a.m.

4The applicant withdrew his application on June 5, 2017 at 4:30 p.m.

5A written motion hearing was set for June 30, 2017 to consider a motion filed by the respondent for costs.

ISSUE TO BE DECIDED

6Is the respondent entitled to recover costs pursuant to Rule 19.1 of the Licence Appeal Tribunal Rules of Practice and Procedure (the "Rules")?

RESULT

7Based on the totality of the evidence before me, I find that the respondent is not entitled to recover costs, pursuant to rule 19.1 of the Rules.

THE LAW

8The Tribunal's authority to award costs comes from two sources:

i) Section 17.1 of the Statutory Powers and Procedure Act ("SPPA"); and, ii) Rule 19.1 of the Rules.

10Section 17.1(1) of the SPPA empowers the Tribunal to order a party to pay another party's costs in a proceeding, according to the rules made by the Tribunal under 17.1(4). Section 17.1(2) states the Tribunal shall not order a party to pay costs unless the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious, or has acted in bad faith.

11Rule 19.1 of the Rules mirrors the language of s. 17.1(2) of the SPPA, and provides that a party may make a request to the Tribunal for its costs, where a party believes that another party in a proceeding, has acted unreasonably, frivolously, vexatiously or in bad faith.

12Prior to April 1, 2016, under s. 282 (11) of the Insurance Act ("ACT"), an arbitrator's jurisdiction and discretion to award expenses was broad. Unlike Rule 19.1, arbitrators at the Financial Services Commission Ontario ("FSCO") could consider criteria other than vexatious, unreasonable, frivolous and bad faith behavior of a party, such as a party's degree of success in the outcome of the proceeding, the conduct of the a party or a party's representative, the failure of a party to comply with undertakings or orders, any written offers to settle, and/or any aspect that was improper, vexatious or unnecessary.¹

13Section 281(11) of the Act was repealed on April 1, 2016. The Tribunal's opinion is that the repeal of s. 281 (11) is a clear statement of the legislature's intent to limit the circumstances where the Tribunal can award costs in a proceeding. However, the repeal of s 281(11) does not prevent parties from negotiating costs and disbursements, between themselves as they settle files.

ANALYSIS

14This motion for costs was brought by the respondent, and the onus is on that party to prove on a balance of probabilities that the applicant acted unreasonably, vexatious, frivolously, or in bad faith.

15The respondent submits that the applicant's main claim for Income Replacement Benefits post-accident, had no merits because of surveillance evidence, and the fact that the applicant's 2015 Notice of Assessment from the Canada Revenue Agency confirmed that the applicant earned post-accident income, which the applicant had been denying.

16The respondent submits that even though there was no merit to the applicant's claim, the applicant waited until 4:30 p.m. on the day before the hearing to advise the respondent that the application was being withdrawn. The respondent had spent the time to meet and prepare expert witnesses, and prepare the document briefs for the hearing. Costs should therefore be granted against the applicant for the withdrawal of his application at the last moment.

17The applicant submits that he also had summoned witnesses, paid attendance tariffs, interviewed witnesses, and prepared a trial brief in anticipation of the hearing. The applicant submits that the main claim was for disbursements of the applicant's rehabilitation costs. The applicant submits that there are questions as to what the respondent's surveillance evidence actually demonstrated and questioned the merits of some of the respondent's other evidence.

18The applicant submits after review of all of the materials, the final assessment was that the costs to continue including expert witness costs, would not ultimately be cost efficient. The applicant came to the conclusion that by terminating the process, this would prevent further expenses, in view of a risk of a result that would be insufficient to cover the added expenses. The applicant also submits that withdrawing the application at that time, avoided the added costs of the experts, counsel, and the time of the Tribunal.

19The issue before the Tribunal on this motion, is to see if there is enough evidence before it, to show that in accordance with Rule 19.1, "that a party has acted unreasonably, frivolous, vexatious, or in bad faith behavior, in the proceeding".

20Proceeding is defined in Rule 2.17 to mean the entire Tribunal process, from the start of the appeal, to the time a matter is finally resolved.

21Does the withdrawal of an application on the eve of a hearing constitute behavior that is unreasonable, frivolous, vexatious, or bad faith behavior, in the proceeding?

22I am not persuaded of a course of action that can be considered to be anywhere near the threshold of unreasonable, frivolous, vexatious or in bad faith. While I agree that the withdrawal of this application may have caused inconvenience to the respondent due to the last minute withdrawal, inconvenience and the expense of preparing for a hearing are not grounds for a claim to a cost award under Rule 19.

23As stated by the Tribunal previously, "applicants may initiate applications where they believe they are entitled to benefits. Respondents have the right to raise appropriate defences in response to those applications. The Tribunal should not deter applicants from filing applications that may have merit. The respondent's interpretation of what is frivolous, vexatious, or in bad faith in this matter would discourage applicants from filing valid applications, and have a negative impact on access to justice".² I am of the view that the withdrawal of an application alone will rarely, if ever, be a sufficient basis on which the Tribunal will make a costs order. Access to justice is central to the mandate of the Licence Appeal Tribunal. As such, a costs award will not be granted merely because a withdrawl has causes another party inconvenience.

CONCLUSION

24Cost awards under Rule 19 are not to compensate parties for suffering an inconvenience or for the costs of their involvement in a proceeding.

ORDER

25For the reasons outlined above, I find that the respondent has not provided sufficient evidence to satisfy Rule 19.1 and therefore the claim for costs is dismissed.

Footnotes

1. 1Rule 75.2 of the FSCO's Practice Code and Section F-Expense Regulation
2. 2N.P.M.T. v State farm Insurance Company, 2016 CanLII 96160 (ON LAT) para 20