Neutral Citation: 1992 ONICDRG 38

P-000260

ONTARIO INSURANCE COMMISSION OFFICE OF THE DIRECTOR OF ARBITRATIONS

BETWEEN:

DANA LEVENSON

Applicant (Appellant; Respondent by Cross-Appeal)

and

THE GENERAL ACCIDENT ASSURANCE COMPANY OF CANADA

Insurer (Respondent; Appellant by Cross-Appeal)

Before:

E. Sachs Director of Arbitrations

Counsel:

A. Douek (for Appellant; Respondent by Cross-Appeal)

T.H. Rachlin, Q.C. (for Respondent; Appellant by Cross-Appeal)

APPEAL DECISION

I. NATURE OF PROCEEDING

By Notice of Appeal filed March 16, 1992, the applicant, Dana Levenson (the appellant) appeals from the Order of Susan Naylor, Arbitrator, dated February 18, 1992 which found the appellant entitled to weekly income benefits of $185.00 for the period September 8, 1990 to October 16, 1990 and required repayment to the insurer, The General Accident Assurance Company of Canada (the respondent) of any weekly income benefits paid to her for the period October 17, 1990 to April 13, 1991.

The orders sought by the appellant are:

1. A stay of the repayment provisions of the arbitral order pending the final disposition of the appeal;

2. A partial oral rehearing of the appeal to adduce further evidence on the appellant's disabilities;

3. An award of weekly income benefits for the period October 17, 1990 to April 13, 1991;

4. An award of expenses of the appeal.

By Response to Appeal filed March 26, 1992, the respondent cross-appeals from the Interim Order of Susan Naylor, Arbitrator, dated October 29, 1991 which determined the respondent was not entitled to raise the issue of the interpretation and application of s.16(3) of the No-Fault Benefits Schedule (Ont. Reg. 273/90) in the arbitration.

The orders sought by the respondent, appellant by cross-appeal are:

1. Leave to extend the time for filing of the cross-appeal to the time of filing of the Response to Appeal;

2. Setting aside the award of weekly income benefits to the appellant for any period she was attending school as a student.

Counsel for both parties filed written submissions and attended before me for oral argument.

II. PRELIMINARY ISSUES

The appellant's request for a stay of the arbitral order and partial oral rehearing, and the respondent's request for leave to extend the time to file its cross-appeal, are dealt with as preliminary issues.

A. Stay of Arbitral Order

In the Response to Appeal, the respondent consented to a stay of the arbitral Order until the release of the appeal decision. Accordingly, a stay was granted and communicated to the parties during oral submissions. The stay of the arbitral Order expires with this decision.

B. Oral Rehearing

In the Notice of Appeal, the appellant asked the appeal be determined partly on the record and partly by way of an oral rehearing to provide further evidence on whether the appellant was substantially disabled from performing the essential tasks in which she would normally engage as a student attending school. This request, pursuant to s.283(4) of the Insurance Act, R.S.O. 1990, c. I-8 was withdrawn at the commencement of oral argument.

C. Leave to Extend Time to File Cross-Appeal

The Interim Order from which the respondent cross-appeals was released October 29, 1991. The final Order was released February 18, 1992. It is the interim decision which determined the respondent was not entitled to raise the interpretation and application of s.16(3) of the No-Fault Benefits Schedule in the arbitration.

The time for requesting an appeal and the Director's discretion to extend the time are set out in s.283(2) and (3) of the Act which provide:

283 -(2) A Notice of Appeal shall be in writing and shall be delivered to the Commission within 30 days after the date of the arbitrator's order and the appellant shall serve the Notice on the respondent.

(3) The Director may extend the time for requesting an appeal, either before or after the 30 days, if the Director is satisfied that there are apparent grounds for granting relief to the person and that there are reasonable grounds for applying for the extension, and the Director may give such directions as he or she considers proper consequent upon the extension.

In the particular circumstances of this case, the arbitral hearing took place on October 17, 1991. Following the evidence, and during the course of argument, counsel for the insurer raised the application of s.16(3) of the No-Fault Benefits Schedule to the case. It was argued that the section precluded the appellant from receiving any income benefits under s.13 of the Schedule for any week in which the appellant attended school. It is common ground that at all material times the appellant was a university student.

The appellant argues the respondent should have appealed the interim decision within 30 days of its release pursuant to s.283(2) of the Act, that is, on or before November 29, 1991.

The respondent submits to have appealed the Interim Order then would have been premature for two reasons. If the arbitrator found in favour of the respondent in the final decision, an appeal on the interim decision is of academic interest only. Also, it made more sense to await the final decision because if the respondent then wished to appeal any aspect of that decision, it would duplicate appeal proceedings and add to the costs, all of which is contrary to the principle of expeditious arbitration proceedings.

The Director, in exercising the discretion in s.283(3) must be satisfied:

a) that there are apparent grounds for granting relief, and

b) there are reasonable grounds for applying for the extension.

Both criteria must be met. The cross-appeal raises an issue which has not been determined in any other arbitration or on appeal. The cross-appeal is not frivolous, nor is the issue only speculative. It was acknowledged by the appellant that if the cross-appeal was successful, the arbitration decision might be moot and the appellant unentitled to any income benefits. While that may or may not be the case, the cross-appeal raises an issue of entitlement potentially going to the root of recovery.

This case is not to be construed as determining a closed category for "apparent grounds" in the first part of the test. The Act is flexible and the Director's discretion is to be exercised in each case on its merits.

The second part of the test is also met. I accept there were reasonable grounds for the respondent not to have appealed the Interim Order prior to the final determination.

Appealing interim orders is to be discouraged. Such proceedings add to the length and expense of an arbitration. They cause confusion and can hamper an arbitrator in determining jurisdiction and in exercising discretion. They introduce an element of interference in the arbitral process which is contrary to the objectives of the dispute resolution scheme.

Accordingly, the time for filing of the respondent's cross-appeal is hereby extended to the time the Response by Insurer was filed.

The consequence of this extension is that the cross-appeal must be dealt with before the appeal. Both counsel submitted if the cross-appeal is successful, there will be no need to deal with the issue of whether the appellant suffered a substantial inability to perform the essential tasks of her occupation, namely that of a student. While I do not find this is the natural result, the cross-appeal will be determined first.

III. SUBMISSIONS AND FINDINGS

A. Cross-Appeal

The respondent submits that the arbitrator erred in not permitting it to rely on s.16(3) of the No-Fault Benefits Schedule in argument at the close of the arbitral hearing. The full section reads as follows:

16 -(1) Subject to section 15 and subsection (3), a person receiving a benefit under this Part may attend school or accept, or return to, work any time during the first two years following the accident for any period of time without affecting his or her benefits under this Part if, as a result of the accident, he or she is unable to continue at school or in the occupation or employment.

(2) Subject to section 15 and subsection (3), after the two-year period referred to in subsection (1), a person receiving a benefit under this Part may attend school or accept, or return to, an occupation or employment for periods of up to ninety days without affecting his or her benefits under this Part if he or she, as a result of the injury, is unable to continue at school or in the occupation or employment.

(3) The insurer is not required to pay weekly benefits under section 13 for any week in which the insured person attends school.

There is no issue that the appellant would be otherwise entitled to weekly income benefits under s. 13 of the Schedule.

At mediation and in arbitration, the status of the appellant as a student was not an issue. The Mediator's Report, describing the issues remaining in dispute noted the insured attended university during the period of disability. The Response by Insurer in the arbitration referred to the fact the appellant continued at school full-time during the period for which the claim for benefits was made. At no time was anyone misled. The parties proceeded on the basis of the appellant's alleged inability to perform those essential tasks in which she would normally engage.

The first time the appellant's status became significant was at the end of the arbitral hearing during submissions by counsel. No motion had been brought before or during the arbitration to have the applicability of the appellant's status to the dispute over entitlement adjudicated. When asked why the matter had not been raised before, the respondent submitted as the insurer did not have the benefit of counsel during mediation and prior to the arbitration hearing, its representative was not aware other provisions of the No-Fault Benefits Schedule might apply.

The respondent submitted the arbitrator, and Director on appeal, must take judicial notice of all provisions of the No-Fault Benefits Schedule and those provisions may be raised, even for the first time, at any stage up to and including appeal. The respondent's position is it should not have to cross-appeal at all - the arbitrator could not, and the Director cannot now, ignore the section and preclude the respondent from relying on it. Although it may have been a "new" point since neither party specifically referred to s. 16(3) in mediation, the appellant herself put it "in issue" by giving evidence and relying on her occupation, as a student, to press her claim for weekly benefits.

I note here that the "judicial notice" argument was not put to the arbitrator, and is not therefore specifically referred to in the interim decision.

The common-law doctrine of judicial notice - that judges must take notice of a public or general statute - is amplified and carried forward in the Interpretation Act, R.S.O. 1990, c. s.7(1) and the Regulations Act, R.S.O. 1990, c.R-21, s.5(4).

In certain circumstances, however, the fact that a statute (or as here, a Regulation) was not specifically pleaded may preclude a party from raising it at a later stage. In the case H.E.P.C. Ontario v. St. Catharines, 1971 CanLII 346 (ON HCJ), [1971] 3 O.R. 674, affirmed 1971 CanLII 696 (ON CA), [1972] 1 O.R. 806, the court refused to allow plaintiff’s counsel to rely on a statutory provision during final argument after the case had closed as the provision took defence counsel by surprise. The court found, had the statute been pleaded, the defendant would have led other evidence during trial. It was held there is no guarantee that a point of law must be heard despite the doctrine of judicial notice.

Where the evidence at the original hearing would have been quite different had the defence been originally pleaded, a court held it was not satisfied all evidence bearing on the new contention was properly brought before it (Scarborough Golf and Country Club v. Scarborough (City) (1988), 1988 CanLII 4829 (ON CA), 66 O.R. (2d) 257).

The dispute resolution process is not as strict in applying limits on what may or may not be argued as the court process is. Arbitration procedures are less formal and technical in their approach. Generally, a new point of law, which might finally determine the case in favour of a party, would not be admitted unless the adjudicator is satisfied all facts bearing on the point are before him or her as completely as if the matter had been canvassed previously, and if given such opportunity, a party could offer no reasonable explanation for excluding it (see The "Tasmania" v. The "City of Corinth" (1890), 15 App. Cas. 223 at p. 225, the classic statement of this principle).

The appellant cannot realistically be surprised by the allegation that she was a student attending school. That is a statement of fact. The evidence relating to her status was fully reviewed at the hearing. While she might be compensated to the extent necessary, by an award of expenses in dealing with the application of s. 16(3) as a matter of law to the facts, that is not the reason as I understand it why the respondent was precluded from relying on the provision.

The respondent states the appellant's entitlement to benefits was always the matter in dispute, at mediation and in arbitration. I agree. The "matter" was entitlement. Sections 281(2) and 282(3) of the Act limit the jurisdiction of the arbitrator to "a matter" on which mediation was had and "all issues in dispute and such other issues as the parties may agree". The Act makes a distinction between "matter" which is the wider expression meaning the thing in dispute, and "issue", being the specific question of law or fact forming the basis of the dispute. This distinction and what follows from it were analyzed in the case Rosa DeCicco v. State Farm Mutual Automobile Insurance Company a decision of the Director released February 21, 1992 (OIC File No. P-000277).

What happened in this case is that the appellant's status was not mediated. Her status was assumed by the insurer not to affect her entitlement on the basis of her substantial inability to perform the essential tasks of her occupation at the time, and assumed by the insured person to make no difference to her claim. The parties may not have understood what the possible consequences of the appellant's status might be. Notwithstanding, it remains the issue itself was not mediated. Hence, the argument is, without the consent of the appellant under s. 282(3) of the Act, the respondent could not raise the appellant's status as an issue.

The appellant did not put her status "in issue" during the hearing as argued by the respondent - she was describing the essential tasks of her occupation at the time. That description related to her inability to perform those tasks and her entitlement to benefits as a consequence. Thus it was that the arbitrator held she was now in the position of dealing with a "new issue" which could significantly affect the outcome of the case.

While the respondent argued it was illogical for the arbitrator to ignore the section and go on to determine the essential tasks of a student, there was no jurisdiction in the arbitrator to do otherwise once she found the appellant's status to be a new issue. The insurer's only remedy, when faced with the jurisdictional dilemma, was to file for mediation on that issue. If the mediation then failed, the insurer could not apply for arbitration but still had its recourse to the courts. This would be a cumbersome, and I believe, unnecessary route to follow.

Neither the appellant nor respondent grasped an essential element implicit in their submissions. It was not a win-lose proposition to apply the section. Both parties were so concerned about s. 16(3) and its interpretation being a "new" issue, that they framed their submissions and arguments that way ignoring there might be other interpretations. Thus the submissions made to the arbitrator and on which she was required to base her decision were flawed.

Far from being another issue, I find the applicability of s. 16(3) is a necessary component in determining not the applicant's entitlement to benefits but the length of time those benefits continued.

Section 16 of the No-Fault Benefits Schedule deals with persons whose basic entitlement to s. 12 and s. 13 income benefits is no longer in dispute. It permits such persons to resume schooling or work without endangering their entitlement to benefits if a relapse occurs. It anticipates someone may not be fully recovered from his or her injuries and relieves against the situation (as sometimes occurred in the previous legislation) where valiant attempts to resume schooling or employment failed within a relatively short time period. Section 16(3) provides that if an otherwise entitled person "attends school" the insurer need not pay benefits. Logically, the section follows the provision that if income is earned by a worker, the amount is deducted from benefits otherwise payable.

I do not read the section as being an absolute bar to receipt of benefits. Attendance at school is not just the physical act of occupying space in a classroom or lecture hall. Attendance at school encompasses many other activities, including the ability to comprehend and absorb classroom and laboratory instruction, complete assigned work, participate in discussions and projects, study, write or take examinations, meet any physical requirements of the course work, and generally function as a part of the student body with provision for some reasonable extra-curricular activity. This does not mean a person must excel in any of these tasks or be able to function in them as if the accident had not occurred, but be substantially able to perform them.

I find the insurer, in considering the above criteria, was unbeknownst to it and the appellant, applying s. 16(3) as it was meant. The insurer paid benefits and embarked on an inquiry into the appellant's abilities as related to her occupation. In so doing, it had to consider that physical attendance at school, of itself, was only one aspect of the overall entitlement matter.

Accordingly, medical reports were considered and further reports requested. The issues in this case remain the extent of the appellant's disability, the length of time it continued, and any subsequent right to recover benefits paid.

Permitting the insurer to rely on s. 16(3) as interpreted above is, therefore, not unfair to the appellant. She has to prove the same case, on disability, as on attendance at school. What is unfair is to categorically deny a benefit based on the appellant's efforts to mitigate her situation by attempting to participate in student life at the earliest possible time.

I do not find the insurer was substituting another "reason" to deny the appellant her benefits. It may have been the insurer's intention to do so at the arbitration and that would support the interim decision findings of the arbitrator that a new issue was being raised. However, since the application of the section as I see it is not a matter of law affecting basic entitlement nor an absolute bar to recovery, the insurer should have been able to ask it be considered in the overall defence of the action. To that extent, the cross-appeal is allowed.

B. The Appeal

The appellant appeals from the main decision of the arbitrator on the crucial aspect of the decision, namely the determination of what the essential tasks were the appellant would normally engage in. The arbitrator, at page 22, listed three essential tasks as displayed by the evidence:

1. attending classes;

2. studying;

3. successfully completing assignments and exams.

The third task is the contested one. The appellant alleges it is here the arbitrator erred in applying incorrect or inappropriate criteria to determine the meaning of "successful" completion of assignments and exams.

The appellant submits the interpretation of this task must be based on the appellant's personal goals and in light of her pre-accident skills and ability. To that end, the analysis is subjective and must consider the possibility of the appellant achieving equal or better marks in her course work than previously, her ability or now lack thereof to attend graduate school and pursue all possible avenues to achieve her chosen career goal. The appellant submits to interpret mere passing of exams as "success" is dangerous as the measure must be her pre-accident abilities, aspirations and personality. It is an error to only consider her current performance as adequate without considering her pre-accident abilities and extrapolating from those her potential in achieving what she had set out to do.

In response, the insurer agrees with the arbitrator's definition of the essential tasks of the appellant as a student. It disagrees that the test is to measure her disability against her aspirations, stating the arbitrator would then have engaged in a speculative exercise as to whether the appellant could have attained better grades, attended a prestigious graduate school, or realized her career goal. The respondent submits finding the appellant's position is correct, is to substitute the test in the No-Fault Benefits Schedule for inquiries more properly made on a question of general damages or loss of opportunity. Not only would such an exercise be an error in law, it is submitted given the structure of the No-Fault Benefits Schedule and the test for employed persons as well as unemployed ones, it is not practical to deal with measures of disability in some other fashion.

At page 25 of the decision, the arbitrator outlines the appellant's position and her finding that to establish entitlement to benefits, the applicant need only demonstrate "substantial inability to perform the essential tasks normally engaged in, not that she could have performed them better or with greater facility but for her injuries". It was put to me that the question boils down to whether the arbitrator erred in law and fact in finding the appellant was not disabled to the extent required beyond a six week period. In support of the proposition that an error was committed, and should be relieved against as being unsupported by the evidence, the appellant cited the case Vito Luigi Calogero v. The Co-operators General Insurance Company a decision of the Director released February 13, 1992 (OIC File No. P-000251).

The appellant submitted that she was being penalized in that while she was physically able to attend her classes and complete the year, including obtaining more than a passing grade in the majority of her courses, no weight was attached to her definition of "personal success". Further, having found both the appellant and her witness to be credible, the arbitrator erred when she stated there was insufficient evidence of the appellant's disability given the medical evidence submitted.

As part of the appeal record, I reviewed the reports of Drs. Grosfield, Allatt, and Cancelliere, and a physiotherapist, Ms. Gellman.

There is no doubt, and the arbitrator so found, the appellant's overall performance was affected by her pain and discomfort. The question, however, is whether the appellant was, as required by the No-Fault Benefits Schedule, substantially unable to perform the essential tasks of her occupation as a student. I note that activities she performed with relative ease now took more time and effort and were accompanied by symptoms for which she required pain relieving medication with attendant side effects of fatigue.

Having considered the reports, it cannot be said there is evidence on which the arbitrator could find that the appellant's substantial inability to perform the essential tasks of a student persisted beyond mid to end October, 1990. In particular, the report of Dr. Allatt, a specialist in physical medicine and rehabilitation, refers to a 70% improvement six weeks post-accident with very little restriction other than heavy labour or participating in vigorous sports activities. The arbitrator reviews the medical evidence at page 22 through 24 of the decision and refers to the appellant's testimony at the hearing. I cannot find, applying the principles outlined in the Calogero decision, the arbitrator so misdirected herself, and made a decision based on little or no evidence that the disability extended beyond the six week period, that I should come to a different conclusion.

The approach taken by the arbitrator in considering firstly what the essential tasks of the appellant were and secondly, how they could be measured, made sense. The appellant's pre-accident performance compared to her actual post-accident achievement is an objective and quantifiable assessment of her ability to complete examinations. To attempt to equate the performance in light of a hope at some future time of attending graduate school would have been inappropriate. Such considerations may be important in assessing damage claims, but have no place in determining what is "substantial" inability to perform essential tasks of a student. I find the arbitrator, in using the criteria she did, did not make an error in law, or fact, which would require the Director to substitute a differing assessment of the evidence.

The appellant also appeals the arbitrator's decision that she is liable to repay weekly benefits received for the period October 17, 1990 to April 13, 1991. No submissions were directed to this point during oral argument nor were any made in writing. The arbitrator's decision is comprehensive in reviewing s. 27 of the Schedule to the circumstances of this case. I see no reason to disturb the arbitrator's findings in that regard.

IV. ORDER

1. The appeal by the insurer from the Interim Order of Susan Naylor, Arbitrator, dated October 29, 1991 is allowed.

2. The appeal by the insured person from the Order of Susan Naylor, Arbitrator, dated February 18, 1992 is dismissed.

3. The stay of the repayment provision of the arbitral order is hereby lifted and the appellant must repay weekly benefits paid to her in respect of the period from October 17, 1990 to April 13, 1991.

4. The appellant is entitled to her expenses incurred in respect of this appeal proceeding as prescribed by Ontario Regulation 275/90.

September 29, 1992

Elisabeth Sachs Director of Arbitrations

Date