Neutral Citation: 1995 ONICDRG 38
File No. A-002691
ONTARIO INSURANCE COMMISSION
BETWEEN:
ADOZINDA OLIVEIRA
Applicant
and
ZURICH INSURANCE COMPANY
Insurer
DECISION
Issues:
The Applicant, Adozinda Oliveira, was injured in a motor vehicle accident on December 28, 1990. She applied to Zurich Insurance Company ("Zurich") and also to another insurer for statutory accident benefits. My previous decision in this matter found that Zurich is the insurer responsible for Mrs. Oliveira's statutory accident benefits, payable under Ontario Regulation 6721.
Zurich has been paying Mrs. Oliveira $185.60 in weekly income benefits since April 22, 1992. However, Mrs. Oliveira claims a greater amount. Mrs. Oliveira also claims care benefits and various supplementary medical and rehabilitation expenses. The disputes were not resolved through mediation, and Mrs. Oliveira applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8.
The issues in this hearing are:
What is the amount of Mrs. Oliveira's weekly income benefit?
Is Mrs. Oliveira entitled to housekeeping and transportation expenses?
What other supplementary medical and rehabilitation items are necessary and reasonable?
Is Mrs. Oliveira entitled to reimbursement for replacement labour on her farm.
Mrs. Oliveira also claims interest on any outstanding amounts owing, and her expenses incurred in the hearing.
Result:
Mrs. Oliveira is entitled to $261.54 per week during her eligibility in 1991, $223.54 per week in 1992 and $107.97 per week in 1993.
Mrs. Oliveira is not entitled to future costs of housekeeping and transportation.
Mrs. Oliveira is entitled to an exercise bike and bench and a three-footed cane.
Mrs. Oliveira is not entitled to reimbursement for replacement farm labour.
Hearing:
The hearing was held in Chatham, Ontario, on August 8, 1994. Submissions were presented by telephone on September 30, 1994, before me, Fred Sampliner, arbitrator.
Carolyn Smith of Maxim Reporting Services recorded the proceeding of August 8, 1994.
Present at the Hearing:
Applicant:
Adozinda Oliveira
Applicant's
James E. S. Allin
Representative:
Barrister and Solicitor
Insurer's
Ian Boundy
Representative:
Barrister and Solicitor
Witnesses:
Adozinda Oliveira - Applicant
Virginio Oliveira - Applicant's spouse
Dr. Harold Merskey
Exhibits:
The parties filed eight exhibits and a case brief.
Evidence and Findings:
Mrs. Oliveira was injured in an automobile accident on December 28, 1990, while vacationing with her family in Vancouver, British Columbia. At the time of the accident, she and her husband owned, operated and lived on a fruit farm near Chatham, Ontario. Zurich was their automobile insurer.
Weekly Income Benefits:
Mrs. Oliveira's husband, Virginio, returned to work on the family farm after the accident. However, Mrs. Oliveira has been unable to assist her husband with the farm work since the accident. Although the parties agree that Mrs. Oliveira's injuries entitle her to weekly income benefits under section 12 of the Schedule, Zurich maintains that the amount of the weekly income benefit should be reduced by Mrs. Oliveira's Canada Pension Plan disability benefits and her share of the post-accident income from the family farm.
Weekly income benefits are provided under section 12 of the Schedule to self-employed persons, such as Mrs. Oliveira, who suffer a substantial inability to engage in their occupation or business due to the injuries sustained in the accident. The insured person may choose to calculate the weekly income benefit using his or her gross earnings for either the four or 52 week period prior to the accident.
The calculation of the weekly income benefit for self-employed people is different than for employed people. First, the gross income of the person is determined, and then the individual's business expenses that cease as a result of the accident are deducted from the gross income, according to section 12(7)3 of the Schedule. This adjusted gross income is multiplied by 80 percent to arrive at the weekly income benefit.
The Schedule's mechanism for limiting the deductions from gross income to those business expenses which cease recognizes that businesses often continue to operate after an accident. In most situations this will allow an applicant greater income upon which to base the benefit, than if all expenses are deducted as a percentage of ownership. Thus, the Schedule's calculation rationally deducts from the person's gross income only those expenses affected by the individual's absence from the business.
Mr. and Mrs. Oliveira testified at the hearing that they were equal partners in the farm. Title to some of the land was vested in Mrs. Oliveira's name only. Other parcels were jointly held by the couple. They worked the land together before the accident, developing the farm into a profitable enterprise. It is clear that Mr. and Mrs. Oliveira shared the work and profits. Based upon the testimony from Mr. and Mrs. Oliveira, I find that Mrs. Oliveira has a 50 percent interest in the farm.
The tax returns of Mr. and Mrs. Oliveira show farm earnings of $52,006 for 1990. The returns indicate that it was a 50/50 partnership for the years up to the accident. Consequently, I find that Mrs. Oliveira earned half of the gross annual farm income, or $26,003, during the 52 week period prior to the accident.
I do not accept the inventory adjustment that Mrs. Oliveira's accounting expert used to calculate her share of the gross annual income. The Doane Raymond accounting report increases Mrs. Oliveira's gross income by $1,727, representing the difference between market value of the farm inventory at the beginning and end of the year. However, the report does not disclose the basis for the inventory values. In any case, Mrs. Oliveira realized no actual income from the unsold farm inventory. Therefore, I find that the paper value of the inventory should not be used in calculating Mrs. Oliveira's gross annual earnings.
Mrs. Oliveira's accounting expert calculated the ceasing expenses as a percentage of some of the farm's operating costs. He characterized ceasing expenses as those costs that might be necessary to preserve the farm assets if it were not operating. Although nothing in the Schedule defines ceasing expenses, this approach does not reflect the facts in this case. The evidence was that Mr. Oliveira continued to operate the farm after the accident, and almost all of the farm expenses continued unabated.
On the other hand, I do not agree with Zurich's approach to ceasing expenses either. Zurich's accounting expert deducted fuel, orchard supplies, truck and building repairs, insurance, fertilizers etc., as ceasing expenses. From the financial documents and the Oliveira's testimony, it is quite clear that all of these expenses continued after the accident, and therefore these deductions are clearly contrary to the facts of this case.
Land rent is the only expense that was not paid after the accident. The Oliveiras rented some farm acreage. Mr. Oliveira was unable to work this rented land without his wife's help, and the lease in the sum of $3,240 per year was apparently not renewed after the accident. I find that the land rent is the only expense which ceased after the accident, and that Mrs. Oliveira's half share is $1,620.
There may be other expenses associated with the farming of this rented acreage, but I could not specifically identify any from the evidence presented.
Thus, I find that Mrs. Oliveira's gross annual income for the 52 week period before the accident, less ceasing expenses, is $24,383. Dividing that figure by 52 weeks and multiplying by 80% equals $375.12, which is Mrs. Oliveira's weekly income benefit under section 12 of the Schedule.
Mrs. Oliveira has Canada Pension Plan disability benefits which should be deducted from her weekly income benefit. Section 12(4)(b) of the Schedule provides that payments from other income continuation plans shall be deducted from the weekly income benefit. Commission decisions have consistently held that CPP disability payments qualify as income continuation plans and are deductible. At the hearing, Mrs. Oliveira conceded that CPP is deductible under the Schedule.
Mrs. Oliveira became entitled to monthly CPP payments of $491.81 beginning March 1, 1992. Her benefits continued at that rate through 1993, and increased to $501.12 as of January 1, 1994. Dividing these monthly amounts by the average weeks per month (4.33) yields respective 1992/3 and 1994 CPP benefits of $113.58 and $115.73 per week. I find that these amounts are deductible from Mrs. Oliveira's weekly benefits.
Post-accident earnings:
After the accident Mr. Oliveira worked hard to cover for his wife's absence from the farm. Sometimes Mr. Oliveira had to hire additional labour to manage the farm. However, despite Mrs. Oliveira's absence and the increased labour costs, the farm earned more money after the accident than before.
At the hearing, Mr. and Mrs. Oliveira explained that more of the fruit trees they had planted during the early years of their farm ownership became mature and bore fruit after the accident, resulting in greater revenues to them. The Oliveira's hard work paid off, as shown by the gross farm revenues on their tax returns:
1991
$55,650
1992
89,511
1993
73,988
Section 15 of the Schedule provides:
The insurer may deduct from any benefit payable under this Part 80 per cent of any income received or available from any occupation or employment subsequent to the accident.
Logically, the net income available is deductible under section 15. This section ties in with the notion of ceasing expenses. That is, in calculating the section 12 benefit, only the expenses that ceased are deducted from gross income. The continuing expenses are deducted against post-accident income.
Mrs. Oliveira admits that the farm earned greater income after the accident than before, and that she and her husband shared equal portions of the farm's post-accident income on their tax returns. However, she argues that because she did not perform the labour, the income was not earned by her. In the result, Mrs. Oliveira maintains, the income is not "available" to her within the meaning of section 15.
The word "available" is a broad term. In my opinion, if the insured person has access to the funds, even as an investor/owner, the net income is "available" within the meaning of section 15 of the Schedule.
The facts of this case demonstrate that Mrs. Oliveira's financial interest in the family farm continued after the accident. There was no separation of the business and personal wealth at any time. For all practical purposes, the farm revenues were available for use by both Mr. and Mrs. Oliveira. Based upon Mrs. Oliveira's continuing interest in the farm and the availability of the money for her personal use, I find that half of the net post-accident income was "available" to Mrs. Oliveira, within the meaning of section 15 of the Schedule.
The net amount due Mrs. Oliveira is calculated below. First, Mrs. Oliveira's Canada Pension Plan benefits are deducted from her weekly income benefit under section 12(4). Then, according to section 15, 80% of Mrs. Oliveira's post-accident income is deducted from the weekly income benefit. I have used half of the net annual farm income for 1991, 1992 and 1993 found in Schedule 3 of Zurich's accounting report.
Weekly benefit
CPP
80% net post-accident income
= net payable
1991
$375.12
113.58
0
= $261.54
1992
113.58
38.00
= 223.54
1993
115.73
151.42
= 107.97
Zurich paid $185.60, the minimum section 12 benefit, from April 22, 1992 through the hearing. Zurich does not dispute Mrs. Oliveira's entitlement until the hearing date. However, I was not provided with all of the figures for 1994. Therefore, I cannot make an order for 1994.
I have set out the method of calculating Mrs. Oliveira's weekly income benefits, from the data presented. The parties should use the same approach in calculating weekly income benefits for 1994.
Supplementary Medical and Rehabilitation Benefits:
Mrs. Oliveira claims that the following items are reasonable expenses for treatment of her accident injuries:
Electric bed
$1,899.
Exercise bike
Exercise bench
Dumbbells
Ankle weights
Home spa
5,399.
Various appliances
At the hearing, Dr. Merskey testified that Mrs. Oliveira suffers from fibromyalgia, a right shoulder impingement syndrome, and depression. Mrs. Oliveira testified that she tires easily, becomes dizzy, suffers sleeplessness, and has numerous aches and pains.
Since the accident, Mrs. Oliveira has more or less continuously attended physiotherapy, and she has been examined by many specialists. According to Mrs. Oliveira, her symptoms persist.
Mrs. Oliveira has submitted a list of 29 appliances which are recommended by Associative Rehabilitation Inc. Included on the list are many kitchen items: a kitchen stool, an electric can opener, an electric jar or bottle opener, a bread slicer, a paring knife and a cutting board. Some are bath items: a bath stool, bath mat, a handheld shower, padded toilet seat, bath sponge and foot brush. Mrs. Oliveira also lists: a button hook, shoe horn reacher, a folding long handled reacher, and walking canes to assist mobility.
Section 6(4) of the Schedule provides that before the insurer pays for a claimed expense, the insured person may be required to submit a signed statement from a qualified medical practitioner attesting to necessity of the claimed expense in treating the injuries.
Mrs. Oliveira did not submit a recommendation in writing from a health care provider who qualifies under section 6. Two occupational therapists signed the report of Associative Rehabilitation Inc. However, occupational therapists are not among the health care providers that may recommend medical appliances under section 6. Dr. Merskey testified at the hearing that all of these devices were reasonably necessary to assist Mrs. Oliveira in maintaining a normal life, but he was not specific on the need for each one of the items. I find that Mrs. Oliveira has not presented sufficient medical evidence to prove that they are reasonably necessary for her treatment or rehabilitation.
Mrs. Oliveira has demonstrated the necessity of a sturdy walking cane. Not long before the hearing began, Mrs. Oliveira's family physician prescribed a cane, one of the listed aids. At the hearing, Mrs. Oliveira sometimes used a cane to walk, however, in most respects Mrs. Oliveira presented a normal appearance. Mrs. Oliveira testified that the rough terrain of the farm required a more complex, sturdy three-footed cane in order for her to get around. I accept this evidence and find that a three-footed cane is a reasonable and necessary expense in Mrs. Oliveira's particular circumstances.
However, I was provided with no other evidence specifically addressing Mrs. Oliveira's need for the other health care aids requested, and I find that they are not reasonably required.
Mrs. Oliveira's family physician prescribed "hot tub" facilities for her fibromyalgia condition, and as a consequence, Mrs. Oliveira purchased a $5,399.25 hot tub for her home. At the time of the hearing, this hot tub had not been installed in the Oliveira home. Mrs. Oliveira testified that she wanted a hot tub to relieve her symptoms, but she also said she had never tried a hot tub or explored using these facilities at a spa or other public facility. Dr. Merskey supports Mrs. Oliveira's need for warm bubbling water therapy.
While I am generally prepared to accept the therapeutic value of a hot tub for treatment of soft tissue injuries, it seems premature for Mrs. Oliveira to have purchased a tub without first investigating its therapeutic value. I believe that Mrs. Oliveira should have tried whirlpool treatments and/or aquafit classes before making a major purchase of this type. Without a history of use and therapeutic value to an accident victim, a major expense like this is not justifiable on its face. I find that the purchase of a hot tub is not a necessary or reasonable expense in Mrs. Oliveira's circumstance.
Similarly, I am not convinced of the necessity or reasonableness of an electric bed. Mrs. Oliveira stated that she is often sleepless, which exacerbates her daytime aches and pains. Dr. Merskey's report states that Mrs. Oliveira often has trouble finding a comfortable sleeping position, and that an electric bed would be wise. The motors in an electric bed move the mattress into different positions without an individual's personal effort. However, neither the medical evidence nor Mrs. Oliveira's testimony suggests that she is unable to change positions on her own. I find that the bed, while offering Mrs. Oliveira more comfort, is not necessary for her treatment and rehabilitation.
I question Mrs. Oliveira's need for the home exercise equipment. Quotes for an exercise bike, the exercise bench, dumbbells and ankle weights were provided to me along with her family doctor's prescription note. In my view, the prescription note is not specific, and is not sufficient to establish a need. The medical records show that Mrs. Oliveira has attended physiotherapy at various times over the last four and a half years since the accident. However, I am unable to draw any conclusions about her physiotherapy regime because I was not provided with the treatment records.
Essentially, I am left with the oral evidence of the need for home exercise equipment. Dr. Merskey was brief on this subject. He said that the dumbbells were "likely necessary", but he cautioned that it was unlikely that Mrs. Oliveira could do exercises using this device. Mrs. Oliveira testified that she actively exercises at home, and that her physiotherapist prescribed them. Dr. Verburg, Mrs. Oliveira's family physician, did not recommend the dumbbells for home use. The physiotherapist cannot issue a qualified opinion for an expense under section 6(4) of the Schedule. Considering Dr. Merskey and the family doctor's hesitancy to recommend the dumbbells for home use, I find that they are not reasonable or necessary.
No acceptable medical certificate of need for the ankle weights was presented, as required by the Schedule. I find that the ankle weights are not a necessary expense.
An exercise bench was recommended by Mrs. Oliveira's family doctor. Dr. Merskey said that patients who have been in physiotherapy for a considerable period should be able to conduct their exercise regime at home. Mrs. Oliveira stated that she does home exercises on her bed, but that it would be beneficial to have an exercise mat or bench. From a practical standpoint, it appears that Mrs. Oliveira could continue her home exercises without a bench. However, it also appears likely that if Mrs. Oliveira is able to exercise more at home, her physiotherapy and travel expenses should be reduced. Therefore, I find that an exercise bench is a reasonable and necessary expense of Mrs. Oliveira's rehabilitation plan.
Zurich has agreed that an exercise bicycle is a reasonable expense of Mrs. Oliveira's rehabilitation, but claims that the $517.48 price from Canadian Tire is expensive. However, Zurich presented no comparative evidence. I find that the price is reasonable.
Replacement Farm Labour:
Between 1991 and 1993 the Oliveiras claim that they paid a total of $38,265.86 for farm help to replace Mrs. Oliveira's workload. In Kevin Zehr and The Guarantee Company of North America, July 30, 1993, OIC File No. A-001963, Arbitrator Makepeace found, under similar facts to the present case, that replacement labour was not compensable as a supplementary medical or rehabilitation expense under section 6(1) (f) of the Schedule. I agree with her conclusion that there is no nexus between the expenses and the accident victim's treatment or rehabilitation. I find that the labour is not a supplementary medical or rehabilitation expense.
Transportation and Housekeeping Expenses:
Mrs. Oliveira has not incurred any housekeeping costs since the accident. She claims future housekeeping expenses of $50 a week.
From the documents before me it appears that no housekeeping claim was submitted to Zurich in the normal fashion, by application to the Insurer. Neither is there any mention of the housekeeping expense in the Application For Appointment of an Arbitrator, the Response By Insurer, or the letters from the pre-hearing arbitrator. I assume the parties have brought this issue to me by agreement because other disputes were in progress.
Procedurally, the Commission has allowed this practice of joining new issues with an existing arbitration by consent. However, difficulties arise where the parties have failed to adequately discuss the additional issues, and do not provide documentation of the need and expenditure. In fact, at the hearing Mrs. Oliveira and her husband gave evidence that the housekeeping has been done by Mr. and Mrs. Oliveira and other family members during the last four and a half years since the accident. Although Mrs. Oliveira continues in treatment for her soft tissue injuries, the records indicate that she has made some recovery. I do not find that the housekeeping is necessary or reasonable.
Similarly, Mrs. Oliveira requests future transportation expenses of $100 per week for Mr. Oliveira to drive her to town for treatment. Mrs. Oliveira may incur travel expenses and submit the charges to Zurich, but I am not prepared at this point to grant her estimated future weekly transportation expenses.
Expenses:
In the decision on the preliminary issue, I commented that some of the evidence presented by Mrs. Oliveira was irrelevant. I was concerned about the buildup of expenses to Mrs. Oliveira where the fees, usually granted to an applicant, are limited to the legal aid rate.
The evidence presented in the second part of this arbitration was handled very efficiently however, and I find that Mrs. Oliveira is entitled to her expenses of the arbitration, according to normal Commission practice.
Order:
Zurich is liable to pay weekly income benefits of $261.54 per week beginning January 5, 1991 to the end of that year, $223.54 per week for 1992 and $107.97 per week during 1993, less any deductions for amounts already paid, plus interest according to the Schedule. Weekly benefits for 1994 shall be calculated according to this order.
Zurich will reimburse Mrs. Oliveira for the cost of the exercise bicycle, exercise bench, and three-footed cane upon her presentation of proof of payment for these items or the Insurer may directly pay.
Zurich shall pay Mrs. Oliveira for her expenses of the arbitration.
April 21, 1995
Fred Sampliner Arbitrator
Date