Neutral Citation: 1992 ONICDRG 15

P-000175, P-000588

BETWEEN:

RICHARD MARK PLOWS

Applicant

(Respondent; Appellant by Cross-Appeal)

and

JEVCO INSURANCE COMPANY

Insurer

(Appellant; Respondent by Cross-Appeal)

Before:

M.P. Richardson, Director's Delegate

Counsel:

John S. McNeil (for Appellant; Respondent by Cross-Appeal)

Brian A. Foster and Lawrence J. Abey (for Respondent; Appellant by Cross-Appeal)

By Notice of Appeal filed February 18, 1992, the insurer, Jevco Insurance Company (appellant), appeals from the Order of Frederika Rotter, Arbitrator, dated January 16, 1992, requiring that the insurer provide the insured person, Richard Mark Plows (respondent) with a suitably modified mini-van under section 6(1)(f) of Regulation 273/90 (the "No-Fault Benefits Schedule"), enacted under the Ontario Insurance Act, R.S.O. 1990, c.I.8.

The orders sought by the appellant are:

A stay of the arbitral order pending final disposition of the appeal;
An order reversing and setting aside the ruling of the Arbitrator as it relates to the purchase of motor vehicle transportation by the insurer.

By Response to Notice of Appeal and Cross-Appeal filed February 25, 1992, the insured, Richard Mark Plows (respondent, and appellant by cross-appeal), cross-appeals from the said Order of Frederika Rotter ruling that the insured was entitled to a modified mini-van and that a special award under section 282(10) of the Insurance Act was not payable to the insured by the insurer.

The orders sought by the appellant by cross-appeal are as follows:

An order that the Order of the Arbitrator be altered to require,

(a) that the insurer provide to the insured a full-size custom modified van; and

(b) that the insurer pay to the insured a special award under section 282(10) of the Insurance Act.

An award of expenses of the appeal and cross-appeal, together with full reimbursement of all disbursement costs for the attendance of expert witnesses at the arbitration hearing and the payment in full of all reports prepared by Future Care Cost Associates, over and above the limits set out in Ontario Regulation 275/90 and Schedule I of the Dispute Resolution Practice Code.

Counsel for both parties were invited to make oral submissions, and a hearing was held in London, Ontario on April 2, 1992. At the hearing, it was submitted that argument should proceed separately with respect to the two main issues that are the subject matter of this appeal and cross-appeal: (1) the nature and extent of the insurer's obligation to provide transportation for the insured under section 6 of the No-Fault Benefits Schedule; and (2) whether a special award is payable under section 282(10) of the Insurance Act. With respect to the latter matter, certain preliminary issues arose in connection with the admissibility of fresh evidence sought to be introduced on behalf of the insured.

Argument was heard with respect to both the transportation issue and the preliminary issues surrounding the application to introduce fresh evidence. I reserved my decision on the preliminary issues. In light of the importance to the insured of an early resolution of the transportation issue, it was agreed that there would be an interim decision dealing with this matter as well as with the issues pertaining to the introduction of fresh evidence, and that the appeal with respect to the special award would be heard subsequent to the release of this decision.

A. The Appeal

1. Stay of Arbitral Order

At the oral hearing, the respondent consented to a stay of the arbitral order for the period of one month, pending the issuance of the interim decision. The stay of the arbitral order expired on May 2, 1992. No application to extend the stay has been made. Accordingly, the Order of the Arbitrator relating to the insurer's obligation to provide a suitably modified mini-van remains in effect.

2. Argument and Findings

The appellant argued that the Arbitrator erred in law in awarding a motorized van under section 6(1)(f) of the No-Fault Benefits Schedule in two respects. First, it was argued that, as section 6(1)(d) addresses the issue of transportation specifically, that provision is exhaustive of an insurer's liability for transportation expenses, and no award relating to transportation may be made under section 6(1)(f). Secondly, the appellant contended that, even if transportation expenses may be awarded under section 6(1)(f), an insurer is liable, by virtue of section 6(4), for only those expenses that are "necessary" for "treatment or rehabilitation". It was the appellant's position that the provision of a motorized van, while perhaps desirable or optimal, was not necessary for the insured's rehabilitation, but rather addressed certain social, recreational and educational needs that are not encompassed by the concept of rehabilitation.

The appellant argued further that, even if some form of motor vehicle transport were authorized by section 6(1)(f) of the No-Fault Benefits Schedule, it should take the form of a car with hand controls rather than a van. Moreover, to avoid over-compensation of the insured, title to any motor vehicle should remain in the insurer.

The respondent (appellant by cross-appeal) argued that the Arbitrator erred only to the extent that she awarded a modified mini-van rather than a full-size custom van, as requested by the insured.

(a) Interpretation of section 6(1)(d) and (f)

The relevant portions of section 6 of the No-Fault Benefits Schedule provide as follows:

6.-(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;

(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

(e) home renovations to accommodate the needs of the insured person;

(f) other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident.

(3) For the purposes of this section, the benefit period is the longer of the two following periods calculated from the day of the accident and ending on the anniversary of the accident:

Ten Years.
Twenty years less the age of the insured person on the day of the accident.

(4) Subject to subsections (5) and (6), the insurer, before making a payment for an expense under subsection (1), may require the insured person to submit a statement signed by the insured person's qualified medical practitioner or psychological advisor stating that the expense is necessary for the insured person's treatment or rehabilitation.

(7) In case of a dispute concerning an expense described in clause (1) (a), (b) or (d), the insurer will pay the expense pending resolution of the dispute.

(8) The maximum amount payable under this section is $500,000 with respect to each insured person.

The basic rule governing the construction of a legislative provision is that the words employed should be given their ordinary, grammatical meaning, unless to do so would result in an absurdity or in some repugnance or inconsistency with the remainder of the legislation: Grey v. Pearson (1857), 6 H.L. Cas 61, at 106. Reading section 6(1)(f) in its ordinary and grammatical sense, the words "other goods and services, whether medical or non-medical in nature ...", would seem clearly to encompass an insurer's liability for the provision of motor vehicle transportation. It is the contention of the insurer, however, that certain rules of statutory construction preclude interpreting these words in accordance with the meaning they would ordinarily bear.

In aid of the argument that section 6(1)(d) is exhaustive of an insurer's liability for transportation expenses, counsel for the insurer referred to the rule of statutory interpretation that, where a legislature has addressed an issue specifically, the specific provision takes precedence over any general provision. Counsel for the insurer cited in support Hirsch et al. v. Protestant Board of School Commissioners, 1926 CanLII 67 (SCC), [1926] S.C.R. 246, at 265, where the following statement by Lord Westbury in Earl of Kintore v. Lord Inverury, [1865] 4 Macg. 520, at 522, is quoted with approval:

If to general words special words are added, the rule specialia derogant generalibus has been applied, and the general words have been limited to the things denoted by the special words of addition; and if, on the other hand, words of general comprehension are added to special words denoting particular things, the general words are confined in their extent and reduced to signify things ejusdem generis with those which are properly denoted by the special expressions.

Hirsch dealt with the interpretation of a general, broadly worded provision, followed by specific provisions. The case does not, in my view, assist in the interpretation of section 6(1) of the No-Fault Benefits Schedule, in which specific provisions are followed by a broad, general provision. Nor is the interpretation of section 6(1) of the No-Fault Benefits Schedule advanced by reference to the maxims specialia derogant generalibus or ejusdem generis, referred to in the passage quoted above.

The rule of statutory interpretation that would appear to be of possible relevance to the case under consideration is expressed in the maxim "expressio unius est exclusio alterius", or "to express one thing is to exclude another": see Dukelow and Nuse, The Dictionary of Canadian Law (1990), at 360.

This statutory maxim is described in 31 Canadian Encyclopedia Digest (Ont. 3d), s. 126 as follows:

By the rule usually known in the form of the Latin maxim `expressio unius est exclusio alterius', mention of one or more things of a particular class in a statutory provision may be regarded as silently excluding all other members of the class. Further, where a statute uses two words or expressions, one of which generally includes the other, the more general term is taken in a sense excluding the less general one. Should it be otherwise, there would have been little point in using the latter as well as the former.

As noted by Driedger, Construction of Statutes (2d ed., 1983), at 123, the statutory maxim may be applied to cases in which legislation contains overlapping provisions, one provision being general and the other a special provision within the general. In such a case, the question arises whether the legislature intended the special provision to be additional or exclusive.

The application of the rule expressio unius est exclusio alterius to a provision similar in structure to section 6(1) of the No-Fault Benefits Schedule was considered by the Supreme Council of Canada in Turgeon v. Dominion Bank, 1929 CanLII 47 (SCC), [1930] S.C.R. 67. In that case, section 75 of the Bank Act, R.S.C. 1927, c.12, authorized the bank to, inter alia,

(d) engage in and carry on such business generally as pertains to the business of banking.

The question before the Court was whether the bank could take or hold insurance policies as security for the repayment of a loan. It was argued that, because clause (c) expressly described certain securities upon which a bank could lend money, but did not include within that description non-negotiable securities, such as insurance policies, it could not have been intended that clause (d) should extend to non-negotiable securities. The Court held, however, that the bank had the power to accept insurance policies as security for a loan under the broad wording of clause (d), and that the enumeration in clause (c) of certain negotiable securities upon which the bank could lend money did not limit the generality of the comprehensive power separately conferred by clause (d).

Regarding the application of the principle expressio unius est exclusio alterius, the Court stated (at 70-71):

The maxim, expressio unius est exclusio alterius, enunciates a principle which has its application in the construction of statutes and written instruments, and no doubt it has its uses when it aids to discover the intention; but, as has been said, while it is often a valuable servant, it is a dangerous master to follow. Much depends upon the context. One has to realize that a general rule of interpretation is not always in the mind of a draughtsman; that accidents occur; that there may be inadvertence; that sometimes unnecessary expressions are introduced, ex abundanti cautela, by way of least resistance, to satisfy an insistent interest, without any thought of limiting the general provision; and so the axiom is held not to be of universal application.

It should be noted that Driedger describes as "obviously fallacious", and as a misapplication of the expressio unius principle, the argument that, because non-negotiable instruments were excluded from clause (c), they were also excluded from clause (d): "The maxim might be invoked to argue that because para. (c) mentions negotiable securities, then non-negotiable are excluded from the same paragraph, but there is no basis for argument that because non-negotiable securities are excluded from para. (c), they are also excluded from para. (d)": Driedger, supra, at 123. This criticism is applicable also to the appellant's interpretation of clauses (d) and (f) of section 6(1) of the No-Fault Benefits Schedule. I find the statutory maxim, expressio unius est exclusio alterius, to be inapplicable to the construction of section 6(1)(f) of the No-Fault Benefits Schedule.

In further support of its contention that section 6(1)(d) defines exhaustively an insurer's liability for transportation expenses, the appellant argued that, in holding that a motorized van was justified under section 6(1)(f), the Arbitrator interpreted section 6(1)(f) in a manner that, in effect, makes it unnecessary for the legislature to have addressed specifically the matters set out in clauses (a) to (e) of section 6(1). In so doing, it was submitted, the Arbitrator offended a rule of statutory construction, the presumption against surplusage or redundancy. The appellant referred to Williams v. Box (1910), 1910 CanLII 42 (SCC), 44 S.C.R. 1, in which Anglin J. states (at 24):

To treat any part of a statute as ineffectual, or as mere surplusage, is never justifiable if any other construction be possible. The rejection or excision of a word or phrase is permissible only where it is impossible otherwise to reconcile or give effect to the provisions of the Act.

I have concluded that the Arbitrator's interpretation of section 6(1)(f) does not have the effect of rendering clauses (a) to (e) redundant. An analysis of section 6(1) suggests that there are reasons for treating separately clauses (a) to (e), on the one hand, and clause (f), on the other. Section 6(1) makes a clear distinction between types of expense, listing in clauses (a) to (e) those expenses to which an insured is prima facie entitled, subject only to the requirement that the expense in question be reasonable: in relation to clauses (a) to (e), section 6(1) states that the insurer "will pay" all "reasonable" expenses resulting from the accident within the benefit period set out in subsection (3), subject to the maximum amount of $500,000 set out in subsection (8). Clause (f), on the other hand, deals with expenses in respect of items not specifically referred to in the preceding clauses ("other goods and services") and imposes, in addition to the requirement of reasonableness, the condition that the expense in question be required because of the accident. Thus, in the case of an expense claimed under section 6(1)(f), it must be established that the insured person requires payment because of the accident; in the case of expenses falling under clauses (a) to (e), no such condition is imposed. It will also be noted that, by virtue of subsection (7) of section 6, an insurer is required to pay an expense described in clause (d) pending resolution of any dispute concerning the expense; no such requirement exists for expenses under clause (f).

I find that the Arbitrator was entitled, by the ordinary wording of section 6(1)(f), and notwithstanding any rule of statutory interpretation, to hold the insurer liable to pay an expense not authorized by clause (d), provided that the requirements of section 6(1)(f) were otherwise met.

(b) Effect of section 6(4)

The Arbitrator found that the criteria that must be met before an insurer will be found liable for an expenditure for goods or services under section 6(1)(f) are as follows: (1) it must be a reasonable expense resulting from the accident; (2) it must be required because of the accident; and (3) a medical practitioner must, if the insurer so requires, provide a signed statement that the expense is necessary for the insured's treatment or rehabilitation. The Arbitrator found that the insured's claim met these three criteria.

The appellant argued that section 6(4) of the No-Fault Benefits Schedule makes it clear that it is an overriding feature of all the expenses enumerated in section 6(1) that they be both necessary for the treatment or rehabilitation of the insured, and not related to other purposes. It was asserted that, while the evidence suggested that motorized transport would improve the psychological outlook and motivation of the insured, a healthy psychological outlook and improved motivation do not fall within the meaning of "rehabilitation"; rather, these states flow from, or are the result of, a successful rehabilitation process. The insurer also argued that the evidence did not establish that a motorized vehicle was "necessary" for rehabilitation in the sense that, without it, rehabilitation would fail. It was the contention of the insurer that the Arbitrator erred in accepting at face value the signed statement of the insured's medical practitioner, Dr. Allatt, to the effect that a motorized van was necessary for the insured's rehabilitation and treatment. The appellant stated that it was the obligation of the Arbitrator to go behind Dr. Allatt's signed statement and to determine to her own satisfaction whether the motorized van was indeed necessary for the insured's rehabilitation or treatment, and whether part of the proposed expense was for purposes unrelated to treatment or rehabilitation.

For reasons set out below, I do not accept these arguments of the appellant. I have concluded that the Arbitrator correctly identified the criteria to be met in establishing entitlement to an expense under section 6(1)(f) of the No-Fault Benefits Schedule, and that the evidence supports her finding that the insured's claim meets these criteria.

The argument of the appellant assumes (1) that before an insurer can be found liable to pay expenses for an item under section 6(1)(f) of the No-Fault Benefits Schedule, there must be a finding that the expenditure is necessary for the insured's treatment or rehabilitation; (2) that "rehabilitation" should be defined restrictively to exclude psychological, social, motivational and educational adjustment to injury; and (3) that the expense in question must not only be necessary for rehabilitation, but must also be referable to rehabilitation exclusively, and not to other needs. I do not believe these assumptions can be sustained.

Section 6(4) requires the insured to submit a statement signed by a qualified medical practitioner or psychological advisor as to the necessity of an expense for treatment or rehabilitation only where the insurer so requires. Section 6, therefore, clearly envisages the possibility that an insurer may not require a signed statement for an item authorized by section 6(1)(f), a situation that would not negate the insurer's liability under clause (f). In my view, the obligation imposed by section 6(4) upon an Arbitrator charged with determining the liability of an insurer for an expense under section 6(1)(f) is to ensure that a signed statement of the sort contemplated by section 6(4) has in fact been submitted where the insurer has so required. In the present case, the insurer imposed such a requirement, and Dr. Allatt's signed statement (Exhibit 5) satisfies it.

Apart from the above-mentioned requirement and the matter of reasonableness, discussed at a later stage in this decision, the inquiry demanded of an Arbitrator by section 6(1)(f) of the No-Fault Benefits Schedule is whether an expenditure is required by the insured because of the accident. In determining whether this criterion is met, the statement of a qualified medical practitioner or psychological advisor as to the necessity of the expenditure for the insured's rehabilitation or treatment will obviously be an important and relevant factor. This statement will be neither conclusive nor exhaustive of the issue, however; nor will it relieve the Arbitrator of his or her obligation to decide whether the criterion is satisfied. It will be one factor, to be weighed along with other relevant considerations.

In the present case, the Arbitrator carefully and appropriately considered both the nexus between the proposed expenditure and the accident (i.e., whether the expenditure was required because of the accident) and the insured's need for a motor vehicle in light of his rehabilitation requirements. The first inquiry is mandated by the wording of section 6(1)(f); the latter is appropriate in light of the purpose of section 6, which includes the provision of rehabilitation benefits to insured persons who have suffered injury.

It was open to the Arbitrator to find, on the basis of the evidence before her, including the report of Dr. Allatt (Exhibit 5), that a motor vehicle was required because of the accident. The Arbitrator concluded that, because of the accident, the insured had extraordinary transportation requirements: he could no longer walk, ride his motorcycle, or use public transport or the motor vehicles of others to perform the various activities comprising daily life. The Arbitrator also found that, because of the accident, the insured's transportation needs had grown, as he was required to attend medical and rehabilitation treatments. The evidence before the Arbitrator established conclusively that the para-transit system in the insured's community was not suitable to satisfy these requirements. The Arbitrator further concluded that having his own motor vehicle would promote the insured's independence and autonomy, thereby furthering "the ultimate rehabilitation goal that the Applicant become as functionally self-sufficient as possible". In so finding, the Arbitrator relied on the evidence of Dr. Allatt (Exhibit 5) that the insured required a motor vehicle "as part of his rehabilitation to assist in ensuring his independence, and to assist in dealing with the psychological effects of his injuries". Dr. Allatt stated that the insured's continued attendance at university was "essential" for his psychological well-being, and that the insured required "for both his treatment and his rehabilitation" a motorized van "for schooling, counselling, treatment, continued rehabilitation and other normal requirements".

I find that the Arbitrator did not err in adopting, by implication, an expansive definition of rehabilitation as including not only physical rehabilitation, but also vocational rehabilitation, psychological adjustment and the promotion of independence and functional self-sufficiency. Support for a definition of rehabilitation encompassing psychological adjustment to injury is found in section 6(4) of the No-Fault Benefits Schedule, which contemplates that a psychological advisor may attest as to the necessity of an expense for rehabilitation. Support for a view of rehabilitation as a long-term, ongoing process may be found also in subsections (3) and (8) of section 6, which provide for very substantial benefits over a long period of time.

Moreover, both the evidence of Dr. Allatt, and that of the insurer's own expert, Dr. Geisler, was consistent with a broad definition of the concept of rehabilitation. Dr. Geisler's report, which was introduced in evidence by the insured, states as follows concerning the goals of rehabilitation (Exhibit 10, at page 2, emphasis added):

The lifeskills that are necessary almost as a basis for the patient to return to a life of dignity and satisfaction, include being able to move about in bed, roll over, sit up, get in and out of bed, into and out of a wheelchair, and to dress and undress, to manage one's own bladder and bowel, to get on and off a toilet, and in and out of a bathtub, in and out of a shower, in and out of an automobile, and to drive away with hand controls, all unaided. It also includes the finding of, and the continuous working at, a satisfying vocational situation from which a reasonable income can be obtained, for with the great emphasis on achievement and material success being the key to personal freedom and self-respect, and with the achievement of these goals being the chief source of satisfaction available to many, it follows that the restoration of the physically disabled is measured, in our society, in terms of social and economic achievement. To fall short of these goals is to be a failure in a highly competitive society and for rehabilitation to have failed.

As to the insurer's contention that the Arbitrator could not properly have concluded on the evidence that a motorized van was "necessary" for rehabilitation, in the sense that rehabilitation would not succeed without it, that contention also must fail as being premised on an unduly restrictive concept of rehabilitation. The Arbitrator was entitled to conclude, on the basis of the evidence before her, that an ability on the part of the insured to participate in normal daily activities without depending on others was necessary for his motivation and psychological adjustment to injury.

The Arbitrator having concluded that the criteria imposed by section 6 have been met, it can be no objection that an expenditure authorized under section 6(1)(f) might incidentally serve needs other than those of rehabilitation. Section 6(1)(f) specifies that the motor vehicle must be required because of the accident; I can find no support, in the wording of section 6(1) or elsewhere, for the suggestion that an item awarded under the authority of section 6(1)(f) must be referable exclusively to the rehabilitation needs of the victim.

(c) Other Arguments

The insurer argued further that, even if some form of motor vehicle transport were authorized by section 6(1)(f) of the No-Fault Benefits Schedule, it should take the form of a car with hand controls. In support of this contention, reference was made to the evidence of Dr. Geisler (Exhibit 10, at page 2) and Dr. Clifford (Exhibit 11, at page 2) that a fully equipped van was unnecessary. It was also suggested that, should the insured be held entitled to a car or other type of motor vehicle, title should remain in the insurer; otherwise, the insured would be overcompensated by virtue of the acquisition of a capital asset that he would not have acquired but for the accident.

In my view, the evidence fully justifies the conclusion of the Arbitrator that, in light of such factors as safety, ease of access and the climatic conditions of the community in which the insured resides, a van was the most appropriate vehicle for the insured.

As to the suggestion that the insurer should retain legal ownership of any motor vehicle for which it is found liable to pay under section 6(1)(f), the Arbitrator found that a motor vehicle should be treated no differently than other items, such as protheses or wheel chairs required because of an accident. I agree with this reasoning. Nothing in the legislation supports the insurer's argument in this respect. Nor is there any precedent for such a position in the law governing compensation for personal injuries in tort. Catastrophically injured tort victims are not infrequently awarded motor vehicles, home additions, and other capital assets on compensatory principles, in an effort to put them in the position they would have occupied had the accident giving rise to their injuries not occurred.

B. The Cross-Appeal

The insured (appellant by cross-appeal) argued that the Arbitrator erred in ruling that the insurer was responsible only for the cost of a suitably modified mini-van for the insured. According to the insured, the no-fault insurance legislation does not require the insured to make do with a lesser vehicle, and the evidence adduced at the hearing before the Arbitrator fully justified the provision of a full-size customized van for the rehabilitation of the insured.

The insured referred to the evidence of William George Richardson of Richardson Access and Mobility Inc. to the effect that a full-size, heavy-duty, conversion van was the best vehicle for the insured, and that a full-size van would give the insured the best mobility. It was argued that, in awarding, instead, a vehicle that was "almost as convenient as the larger vehicle", the Arbitrator effected a compromise that was neither authorized by the legislation nor supported by the evidence.

The insurer (respondent by cross-appeal) stated that it was the duty of the Arbitrator to assess what was a reasonable expense under section 6(1) of the No-Fault Benefits Schedule; that there clearly was evidence upon which the Arbitrator could arrive at her decision that a suitably modified mini-van was a reasonable expense under the legislation; and that, in the absence of demonstrable error on the part of the Arbitrator, the Director should not substitute his or her judgment for that of the Arbitrator.

In support of the last-mentioned proposition the insurer referred to a decision of this tribunal, Calogero v. Co-Operators General Insurance Co., OIC File P-00251, Decision of the Director (February 13, 1992), wherein the following statement appears (at pages 7-8):

The principle, as generally understood, is one should only interfere in the discretion exercised by the trier of fact if it is so clearly wrong as to amount to an injustice (Elsom v. Elsom, 1989 CanLII 100 (SCC), [1989] 1 S.C.R. 1367). There must be some special reason to doubt the arbitrator's conclusions such that to overturn them would only be found in an extraordinary case ... . While the Director is required to re-examine the evidence to ensure no error occurred and that the arbitral findings are supportable given the evidence, it is not the Director's function to substitute her assessment for that of the arbitrator.

I accept this statement as setting forth the approach to be adopted in reviewing the Arbitrator's determination as to the reasonableness of an expenditure under section 6(1) of the No-Fault Benefits Schedule.

I have concluded that the Arbitrator did not err in ordering that the insurer pay for the cost of a modified mini-van rather than a full-size customized van as requested by the insured. Section 6(1) of the No-Fault Benefits Schedule states that the insurer will pay all "reasonable" expenses resulting from the accident. The use of the word "reasonable" implies some limitation on the amount that may be awarded under section 6(1). The section requires that the Arbitrator make a determination as to what is reasonable in the circumstances, a determination necessarily involving the exercise of judgment by the Arbitrator. I cannot find that the Arbitrator exercised this judgment on improper principles or in disregard of the evidence. My review of the evidence and of the fully reasoned decision of the Arbitrator indicates that she carefully considered the evidence concerning the needs of the insured and ordered a vehicle that satisfied those needs, rejecting as exorbitant or unreasonable only the cost of certain optional items that, in her judgment, were unrelated to the needs of the insured. The evidence was to the effect that a suitably modified mini-van would cost $38,000, while a full-size customized van would cost $50,000. In light of the requirement of section 6(1) that the expense be reasonable, the Arbitrator was justified in balancing the substantially higher cost of a customized full-size van against the relative advantages and disadvantages of a suitably modified mini-van.

The foregoing conclusions are subject to one reservation relating to the Arbitrator's finding that the cost of auxiliary air conditioning for the insured's van was an unreasonable expense. At the oral hearing, counsel for the insured argued that the evidence before the Arbitrator fully justified a finding that auxiliary air conditioning was a medically necessary expense because the insured lacks thermo regulation of his body temperature as a result of his injuries. Counsel for the insurer, in response, referred to the evidence of Dr. Geisler (Exhibit 10) to the effect that the insured's need for air conditioning would depend upon whether his level of paraplegia is at or above the 6th thoracic level. The insured fractured his spine below the 6th thoracic level, at the level of T-8.

Upon reviewing the record for purposes of preparing my findings on this point, and in the absence of a transcript recording the oral evidence presented at the arbitration hearing, I requested clarification in the form of written submissions by the parties, setting forth their positions as to the need for auxiliary air conditioning, with particular reference to where on the record support for their positions could be found. Counsel for the insured responded, enclosing with his submissions a further report of Dr. Allatt, dated April 30, 1992, which was stated to be in clarification and amplification of Dr. Allatt's testimony at the arbitration hearing. Counsel for the insurer has objected strenuously to the introduction of this report as constituting fresh evidence.

In the absence of a transcript, I am unable to determine the extent to which Dr. Allatt's report of April 30, 1992 simply restates and clarifies his testimony at the arbitration hearing, and what portions, if any, constitute fresh evidence. Because of this difficulty, and because considerations of fairness require that the insurer have the right to challenge the evidence submitted on behalf of the insured, I am of the view that the issue relating to the need for auxiliary air conditioning should be reserved and that there should be a rehearing of evidence on this point only. Authority to hold a rehearing with respect to some or all of the issues on an appeal is found in section 283(4) of the Insurance Act, and in section 29.4 of the Dispute Resolution Practice Code.

Accordingly, subject to a rehearing of evidence on the issue of the insured's need for auxiliary air conditioning, the cross-appeal is dismissed and the Arbitrator's Order relating to the provision of a min-van is affirmed. Upon the issuance of this decision, the insured is entitled to the provision of a van in accordance with the Arbitrator's Order; provision of the van should not await determination of the issue of entitlement to auxiliary air conditioning. If entitlement is established, auxiliary air conditioning can be installed at a later date.

III. SPECIAL AWARD

Preliminary Issues

The second issue raised on appeal relates to the Arbitrator's decision not to make a special award under section 282(10) of the Insurance Act. Prior to the date set for hearing oral argument on this issue, counsel for the insured (appellant by cross-appeal) sought leave to introduce certain evidence that was stated to have been unavailable at the hearing before the Arbitrator. The evidence in question consisted of an affidavit by Mr. Robert Plows, father of the insured. The affidavit stated that Mr. Plows had been advised by the Investigator retained by the insurer, Ms. Christine Terashita, that a representative of the insurer had instructed her not to forward any information relating to claims by the insured or his family by telephone or facsimile, but rather to send such information by ordinary regular mail. Counsel for the insurer objected to the introduction of this evidence on appeal as inadmissible. It was also submitted that, because I had read the evidence sought to be introduced, I was precluded from proceeding with the portion of the appeal relating to the special award, as I would be unable to erase from my mind the prejudicial effect of this evidence. Both issues were argued before me at the conclusion of argument relating to the Arbitrator's award of a mini-van.

1. Admissibility of Fresh Evidence on Appeal Before Director

Counsel for the insured argued that the Dispute Resolution Practice Code gives the Director complete discretion to admit fresh evidence on appeal and to proceed to hear, by way of a rehearing, viva voce evidence of witnesses on the issue raised in Mr. Robert Plows' affidavit. Counsel for the insured argued that the fresh evidence should be admitted as going to the issue of whether the insurer had "unreasonably withheld or delayed payments" under section 282(10) of the Insurance Act, and to the issue, argued before the Arbitrator, of the nature and extent of an insurer's obligation to facilitate the making of rehabilitation benefits available to an insured person who has suffered catastrophic injuries.

Counsel for the insurer objected to the admission of the evidence on a number of grounds. It was argued that to admit the evidence would give it a prominence out of all proportion to its importance in relation to the mass of evidence heard by the Arbitrator on the issue. Counsel for the insurer also argued that the question of the admissibility of evidence on appeal before the Director should be determined in accordance with the tests governing the introduction of fresh evidence on appeal in court, and that, on the basis of these tests, the evidence should be ruled inadmissible.

Both parties agreed that, should I admit the evidence in question, Mr. Robert Plows should give viva voce evidence and should be subject to cross-examination, and that the insurer should have an opportunity to introduce evidence in reply. Counsel for the insured, Mr. Foster, indicated that, in the event that the insurer decided not to call Ms. Terashita, he would request that a summons be issued to secure her presence at a rehearing to testify as to the allegations contained in Mr. Plows' affidavit.

In determining the admissibility of evidence in proceedings before the Director, a number of statutory provisions and practice rules are relevant. Section 15 of the Statutory Powers Procedures Act, R.S.O. 1990, c. S.22, which is applicable to the present appeal proceedings, provides in part as follows:

15.(1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.

(2) Nothing is admissible in evidence at a hearing,

(a) that would be inadmissible in a court by reason of any privilege under the law of evidence; or

(b) that is inadmissible by the statute under which the proceeding arises or any other statute.

(3) Nothing in subsection (1) overrides the provisions of any Act expressly limiting the extent to or purposes for which any oral testimony, documents or things may be admitted or used in evidence in any proceeding.

Section 283(4) of the Insurance Act affords the Director great latitude in deciding the manner in which an appeal from the order of an arbitrator will be determined. The subsection provides:

(4) The Director may determine the appeal on the record or by way of a rehearing of all the issues before the arbitrator or partly on the record and partly by way of rehearing as the Director in his or her opinion may decide.

By virtue of section 21 of the Insurance Act, the Director is authorized to make rules for the practice and procedure to be observed for a proceeding before the Director or an arbitrator. In this respect, reference should be had to section 18 of the Dispute Resolution Practice Code, issued by the Ontario Insurance Commission, which provides in part:

Evidence

18.1 The arbitrator shall judge the relevancy and materiality of the evidence offered, and conformity to legal rules of evidence is not necessary.

18.2 Notwithstanding Section 18.1, the arbitrator shall not admit evidence at a hearing.

(a) that would be inadmissible in a court by reason of any privilege under the law of evidence; or

(b) that is inadmissible under the Insurance Act.

While section 18 does not deal with evidence in proceedings before the Director, section 42.5 of the Dispute Resolution Practice Code provides as follows:

42.5 Where matters are not provided for in this Code, the practice shall be determined by analogy to them.

It is clear that, subject to considerations of privilege and the requirements of natural justice, fairness and relevance, the Director has a broad discretion to admit on appeal evidence that would be inadmissible in a court of law. Thus, the criteria developed by the courts to govern the admission of fresh evidence on appeal in civil and criminal litigation are not binding on the Director.

These criteria, as set out by the Supreme Court of Canada in the context of criminal appeals in Palmer v. The Queen, [1980] l S.C.R. 759, and reiterated in R. v. Stolar, 1988 CanLII 65 (SCC), [1988] 1 S.C.R. 480 are as follows:

The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial;
The evidence must be credible, in the sense that it is reasonably capable of belief;
The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial; and
The evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

The third and fourth criteria obviously overlap. Moreover, the test articulated therein has been subject to differing formulations in the cases. In more recent Ontario civil cases, the test has been stated to be whether the evidence, if admitted, "would probably have had an important influence on the result": See Cook v. Mounce (1979), 1979 CanLII 2039 (ON HCJ), 12 C.P.C. 5 (Ont. Div. Ct.); and Al-Sagar & Brothers Engineering Project Co. v. Al-Jabouri (1989), 46 C.P.C. (2d) 69 (Ont. H.C.).

In other cases, courts, including the Supreme Court of Canada, have stated that in civil appeals the evidence sought to be introduced must be "practically conclusive" of a decisive or potentially decisive issue: see MacDonald v. Pier, 1922 CanLII 29 (SCC), [1923] S.C.R. 107; Glatt v. Glatt, 1935 CanLII 16 (ON CA), [1936] O.R. 75 (C.A.), aff'd 1937 CanLII 8 (SCC), [1937] S.C.R. 347; Dormuth v. Untereiner, [1964] S.C.R. 123; Mercer, et al. v. Sijan, et al. (1977), 14 O.R. (2d) 13; and Schiff, Evidence in the Litigation Process (3d ed., 1988), Vol. 1, at 123. At least one court has expressed the view that the test is essentially the same under both formulations: see Maitland v. Drozda, 1983 CanLII 2050 (SK CA), [1983] 3 W.W.R. 193 (Sask. C.A.), at 200.

In addition to the criteria set out above, the Ontario Court of Appeal has identified policy considerations to be weighed in considering whether to admit fresh evidence on appeal, these being the "public interest in finality to the litigation ... and the affront to common sense involved in a Court shutting its eyes to a fact which falsifies the assessment": Mercer, et al. v. Sijan, et al, supra, at 17.

Having set forth the criteria and considerations governing the admissibility of fresh evidence in civil appeals, it remains to be determined whether these should be applied in the present proceedings. While the tribunal is not bound by the strict rules of evidence, the evidence admitted must be reliable and relevant. In exercising a discretion to admit evidence, the Director must be guided by principles of fairness to the parties, and should consider the rationale underlying the evidentiary rule in determining its applicability to the adjudicative proceeding in question. The present appeal proceedings, although part of a statutory dispute resolution process, are not unlike a civil appeal in that they involve the resolution of a dispute between two parties. In both cases, considerations of finality argue in favour of rules limiting the admissibility of fresh evidence on appeal. Moreover, arbitration is intended to offer an expeditious means of resolving disputes between the parties. Accordingly, while the criteria and considerations outlined in the context of civil appeals are not binding in appeal proceedings before the Director, they are nonetheless useful as general guidelines in determining whether to exercise a discretion in favour of the admission of fresh evidence.

I find the affidavit of Mr. Plows, although technically hearsay, to be reasonably capable of belief. No doubt this evidence, if admitted, would be tested in the course of the appeal.

As to whether the evidence could have been adduced at the original hearing with due or reasonable diligence, reference should be made to a number of English cases that have considered the issue of what constitutes reasonable diligence. In House v. Haughton Bros. (Worcester) Ltd., [1967] 1 W.L.R. 148, a decision of the English Court of Appeal, the plaintiff brought an action for injuries sustained at work, alleging, inter alia, that the defendants had failed to make adequate scaffolding available. At trial, the Judge accepted the evidence of the defendants that the requisite number of scaffolding boards had been available to the plaintiff at the time of the accident. Following this decision, a number of persons, including two witnesses who had testified for the plaintiff at trial, but who had not been questioned nor given evidence as to the availability of scaffolding, came forward to state that the employers had brought two of the three scaffolding boards in question onto the premises following the accident. The witnesses stated that they had omitted to give evidence on this issue because they were employed by the defendants and believed that the plaintiff would succeed without the evidence in question. The Court of Appeal admitted the evidence, Winn, J. stating (at 153-54):

[W]here the situation is that although a witness is called at the trial and physically present in the witness-box, and although he gave evidence about some matters relevant in that trial, he had not told the solicitors, or party who caused him to be called as a witness, what he was able to say about some issue in the trial: then his evidence upon that issue `could not have been obtained with reasonable diligence', if it can be assumed that the solicitors are not shown to have been careless or neglectful or dilatory in the manner in which they interviewed him to see what evidence could be given by him at trial.

In Linton v. Ministry of Defence, unreported (The Times, November 4, 1983), the House of Lords upheld a decision of the Court of Appeal not to admit fresh evidence because the central issue was obvious to all. The evidence now relied upon by the plaintiff was obviously important to the plaintiff's action, and the fact that the plaintiff "recalled" the crucial evidence after judgment could not satisfy the reasonable diligence test. As the Court remarked,

Ours is an adversarial system and it is the duty of a plaintiff to come to court with the evidence to prove his case.

These two cases were considered recently in Williams v. Reason, [1988] 1 W.L.R. 96 (C.A.). In Williams, the Court held that the failure to attempt to find and to obtain evidence from an important witness could not be justified by an argument that the witness was perceived to be in the other party's camp. Stephenson L.J. stated as follows:

[I]t is, in my judgement, important to discourage litigants from seeking to put before this Court evidence that they have made no attempt to obtain in order to support a new case that they hope will succeed when the case that they have made has failed. It is only in clear cases that this Court will allow an unsuccessful litigant, who has not tried to obtain the fresh evidence, to be excused the attempt and to adduce the evidence.

Turning to the present case, I am advised that, although the information relating to the alleged instructions of the insurer to Ms. Terashita was known to Mr. Robert Plows at the time of trial, he was under great stress because of his son's catastrophic injury and failed to communicate this information to his son's solicitor. Upon reading the decision of the Arbitrator and the submissions and argument of the insurer in preparation for this appeal, Mr. Plows' memory was jogged, and only then did he communicate the evidence in question to counsel for the insured.

While the facts of the case are, in some respects, similar to those in House v. Haughton Bros.(Worcester) Ltd., discussed above, in the present case Mr. Robert Plows gave evidence at trial relating to his concerns about the insurer's delay and whether he was being dealt with fairly. He simply failed to offer the evidence in question in further support of his position. No doubt many witnesses, under the stress of testifying, fail to give evidence as completely as they might wish, neglecting to put forward some fact that would add further support to their evidence on a particular point. Although I am not subject to the same considerations as constrain a court, I am mindful that arbitration is intended to offer an expeditious method of resolving differences between an insurer and an insured. It is not, in my view, appropriate, in the absence of special circumstances, to permit the proceedings to be prolonged by allowing a witness, who has testified concerning an issue before the Arbitrator, to introduce on appeal evidence of which he was previously aware in further support of a position adopted in the earlier proceeding.

The evidence should also be such that, if believed, it could reasonably be expected to have had (depending on the formulation of the test employed), an "important" or "practically conclusive" effect on the result. In the present case, the Arbitrator based her decision not to make a special award under section 282(10) of the Insurance Act with respect to the home renovations on the fact that the insurer did not receive a copy of the second Future Care Costs Associates report, containing a revised estimate of the cost of home renovations, until just prior to the arbitration hearing, some several months after preparation of the Report. The Arbitrator specifically found that, the initial renovation plan (the Winmar plan) having been received by the Investigator on February 5, 1991, and having been authorized by the insurer on February 20, 1991, the delay of approximately two weeks did not constitute an unreasonable delay in the circumstances.

The affidavit of Mr. Robert Plows alleges that Ms. Terashita advised him in February, 1991, that she had been instructed by a representative of the insurer, whose name Mr. Plows cannot recall, to communicate concerning the insured's claim only by ordinary mail. In considering the effect of this evidence, if established, on the decision of the Arbitrator, I am doubtful whether it would have affected her decision that a delay of two weeks was not excessive, and that the failure of the insurer to make payments for home renovations subsequent to February 20, 1991 was due at least in part to the failure of the insured to make available to the insurer the Second Future Care Costs Associates report, which ultimately formed the basis of the settlement achieved by the parties.

Accordingly, I am of the opinion that the evidence relating to the insurer's alleged instructions to Ms. Terashita concerning the manner of communicating information relating to the claims of Mr. Plows and his family, should not be admitted. The cross-appeal of the issue relating to the special award will proceed on the record, with oral argument on matters that have been the subject of submissions received to date.

2. Right of the Director to Proceed

The insurer contends that, having read the affidavit of Mr. Robert Plows concerning the fresh evidence sought to be introduced on appeal, I am precluded from proceeding to hear the cross-appeal relating to the special award, presumably on the basis that there exists a reasonable apprehension of bias.

The only case referred to me by counsel for the insurer in support of the insurer's position was Nash v. Glickman and Gibson (1975), 1975 CanLII 671 (ON CA), 7 O.R. (2d) 711, a case in which an appellant sought leave, at the commencement of appeal proceedings, to introduce fresh evidence of a psychiatric nature. The Court of Appeal noted the "impropriety" of filing material for which leave is sought before an application for leave to introduce new evidence has been heard, and refused to admit the evidence in question on the basis that it did not meet the tests imposed by the case law. It is significant, however, that, notwithstanding its exposure to the evidence improperly filed, the Court of Appeal does not appear to have considered itself disqualified from proceeding to hear the appeal on the merits.

Among the authorities to which I was referred by counsel for the insured were Jackson, et al. v. Inglis (1985), 50 C.P.C. 126 (Ont. C.A.); and Re Houston, et al. and Cirmar Holdings Ltd., et al. (No.1) (1977), 1977 CanLII 1250 (ON HCJ), 17 O.R. (2d) 254 (Ont. C.A.). In the former case, the trial judge discharged the jury because of a reference to the fact that the plaintiff was insured, and proceeded to try the case himself rather than permitting the trial to proceed or directing that the trial stand over and proceed before another Court with a jury. The Court of Appeal refused to interfere with the trial judge's exercise of discretion. Re Houston was an appeal from a decision of the Ontario Municipal Board, in which the appellant sought to introduce certain new evidence found in the files of the Board. This evidence was appended to the motion for leave to introduce new evidence. The Court of Appeal admitted the evidence, stating that the strict rules governing the admission of new evidence in civil proceedings should be relaxed in appeals from decisions of administrative tribunals that administer policy and that have in their files, prior to the commencement of proceedings, evidence relating to the proceedings.

None of these cases appears directly relevant to an administrative appeal from a decision of an Arbitrator concerning the rights of parties to a dispute under the Insurance Act. Moreover, the Director is not bound by the practice of the courts in appeals from lower courts or from administrative tribunals that administer policy, whatever it may be. As outlined earlier in this decision, the Director has a broad discretion to judge the materiality and relevance of evidence and to admit evidence that would be inadmissible in a court of law, subject always to the requirements of fairness and the rules of natural justice. It would be inconsistent with this discretion, as well as a matter of great administrative inconvenience, to hold that the Director was disqualified from proceeding with an appeal where the nature of the evidence sought to be introduced was disclosed.

I have considered whether my proceeding to hear the cross-appeal on the issue of the special award would give rise to a reasonable apprehension of bias. I have concluded that a reasonable person, who is both objective and well-informed, would not conclude that, simply by virtue of my exposure to the evidence in the course of exercising a discretion to determine its admissibility, I am incapable of rendering a fair and impartial decision on the issue under appeal. Accordingly, I decline to disqualify myself from proceeding to hear the cross-appeal relating to the issue of the special award.

IV. EXPENSES

The insured claimed (1) his expenses of the appeal and cross-appeal; and (2) full reimbursement of all disbursement costs for the attendance of expert witnesses at the arbitration hearing and payment in full of all reports prepared by Future Care Costs Associates, over and above the limits specified in Ontario Regulation 275/91 and Schedule I of the Dispute Resolution Practice Code.

The insurer claimed its costs of the cross-appeal. Although the matter was not the subject of argument, the insurer is not entitled to an award of expenses under the Insurance Act, ss. 282(10), 283(7).

At the oral hearing of April 2, 1992, no argument was addressed to the issue of the insured's entitlement to the expenses listed in item (2) above. This matter will be addressed at the hearing of the cross-appeal relating to the special award, as will the question of the insured's entitlement to his expenses of the appeal and cross-appeal. I note for purposes of the record the insurer's position that, as the appeal and cross-appeal raise difficult questions involving the interpretation of new legislation, the insurer does not object to the insured's being awarded expenses of the appeal and cross-appeal.

V. ORDER

Subject to item 2, below, the appeal and cross-appeal from the Order of Frederika Rotter, Arbitrator, on the issue of the insured's entitlement to a suitably modified mini-van are dismissed.
There should be a rehearing of evidence relating to the insured's need for auxiliary air-conditioning of the mini-van.
The application by the insured to introduce fresh evidence in connection with the cross-appeal relating to the special award is denied.
Issues relating to the insured's entitlement to expenses will be determined following the hearing of the cross-appeal relating to the special award.
The insurer is not entitled to an award of costs under the Ontario Insurance Act.

May 1, 1992

M.P. Richardson

Director’s Delegate

Date

Richard Mark Plows v. Jevco Insurance Company, 1992 ONICDRG 15

Case Summary