Adozinda Oliveira v. Zurich Insurance Company, 1996 ONICDRG 154

Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1996 ONICDRG 154

Appeal P-002691

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ADOZINDA OLIVEIRA Appellant

and

ZURICH INSURANCE COMPANY Respondent

Before: Susan Naylor, Director’s Delegate

Counsel: James E.S Allin (for Ms. Oliveira) Ian Boundy (for Zurich)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Paragraph 1 of the arbitrator’s order, dated April 21, 1995, is varied as follows:

In calculating Mrs. Oliveira’s weekly income benefits, Zurich is entitled to deduct CPP payments of $491.81 a month, starting on March 1, 1992 until December 31, 1993; $501.12 a month in 1994; $503.63 a month in 1995 and $512.70 a month in 1996.

The amount of weekly income benefits, set out in paragraph 1 of the arbitrator’s order, dated April 21, 1995, together with interest, shall be adjusted accordingly.

2. Paragraph 2 and 3 of the arbitrator’s order are confirmed.

3. The arbitrator’s order is varied such as to add paragraph 4, as follows:

4. Zurich will reimburse Mrs. Oliveira the amount of $1,899.00, representing the purchase price of an electric bed, plus interest according to the Schedule.

5. Mrs. Oliveira is entitled to her appeal expenses.

September 12, 1996

Susan Naylor Director’s Delegate

Date

REASONS FOR DECISION

I. THE NATURE OF THE APPEAL

The key facts are set out in the arbitration decision, and are undisputed on appeal.

Mr. and Mrs. Oliveira owned and operated a family fruit farm. They worked in partnership, cultivating the orchards and harvesting and marketing the produce. They shared in the returns of their labour on an equal footing.

Mrs. Oliveira was injured in an automobile accident on December 28, 1990, in which she suffered soft-tissue injuries of a whiplash nature. Her condition has been complicated by the development of severe fibromyalgia and chronic pain. The diagnosis also includes depression and right shoulder impingement syndrome, as well as other ancillary problems. She has seen many specialists, including Dr. Merskey, an expert in the treatment of chronic pain, who testified on her behalf at the arbitration hearing. Dr. Goldenberg, a trauma consultant who assessed Mrs. Oliveira at Zurich’s request, agrees that her condition is severe and well-established. The treatments she received have not resolved her problems, and she has been unable to resume work since the accident. The doctors are pessimistic about her prospects for a full recovery.

Mrs. Oliveira claimed accident benefits from Zurich Insurance Company (Zurich). She received weekly income benefits based on her inability to work on the farm, but disputed the calculation of her income on which her benefits were based. She and Zurich also disagreed about Zurich’s obligation to pay for a variety of assistive appliances and devices, and to reimburse the family for the cost of additional farm labour hired to replace Mrs. Oliveira’s work.

The arbitrator allowed a few of the appliances and devices that Mrs. Oliveira claimed as necessary for her rehabilitation, but disallowed most of the items. Mrs. Oliveira appeals the disallowed claims. She also appeals the arbitrator’s refusal to award additional farm labour costs as a rehabilitation expense. Mrs. Oliveira does not appeal the arbitrator’s determination of her income before and after the accident, or the formula applied in calculating her weekly income benefit amount, but she seeks a correction of the amount of Canada Pension Plan (CPP) disability benefits to be deducted.

The appeal proceeded on the basis of the arbitration record and the written submissions of the parties. A transcript of Dr. Merskey’s testimony at the arbitration hearing was provided, but not that of Mr. and Mrs. Oliveira’s testimony.

II. REHABILITATION EXPENSES

Mrs. Oliviera claimed reimbursement of the cost of various implements and appliances, that were disallowed by the arbitrator. The automobile insurance policy that covers Mrs. Oliveira provides the accident benefits prescribed in the Statutory Accident Benefits Schedule - Accidents before January 1, 1994, R.R.O. 1990, Reg 672 (the “Schedule”). Section 6 deals with medical and rehabilitation costs. It states:

(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;

(c) rehabilitation, life-skills training and occupational counselling and training;

(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:

1. Ten years

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

(4) Subject to sections (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.

(5) A person qualified to practise as a chiropractor may sign a statement required under subsection (4) in respect of chiropractic services under clause (1)(a).

(6) A person qualified to practice dentistry may sign a statement required under subsection (4) in respect of dental services and dentures under clauses (1)(a) and (b).

(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.

In this case, the arbitrator had to decide whether the items claimed fit under subsection 6(1)(f) as reasonable expenses required because of the accident. This involves questions of fact, to be determined on the evidence. The view of the claimant’s doctors, while very important to the inquiry, is not conclusive of whether the items are required for the person’s treatment or rehabilitation. Medical evidence may have much less bearing on whether the expense claimed is reasonable.

In Plows and Jevco Insurance Company (May 22, 1992, P-000175, P-000588), Director’s Delegate Richardson discussed the effect of a statement verifying the person’s needs under section 6(4):

. . .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.

(Decision, page 14)

An appeal will succeed if the arbitrator made an error of law that is material to the result, or misapplied the law to the facts. However, the arbitrator’s findings of fact are more difficult to disturb. He or she had the benefit of observing and hearing the witnesses in person and of considering the medical reports in the context of the evidence as a whole. Because of this advantage, the arbitrator’s findings should not be interfered with unless he or she ignored material evidence or arrived at unsupported conclusions. It is not sufficient merely to disagree with the weight the arbitrator decided to give each piece of evidence, or with his or her view of the totality of the evidence. That is a matter for the arbitrator’s judgment.

Mrs. Oliveira sought payment for a number of items including a hot tub/home spa and an electric bed, both of which she had already bought. She also asked for home exercise equipment and a list of thirty-or-so less expensive assistive implements and devices to help her around the home. The arbitrator dismissed most of the claims, because he did not consider the items necessary for Mrs. Oliveira’s rehabilitation or reasonable. With the exception of the electric bed, his reasons for refusing these claims are entirely supportable. Given the multiplicity of issues before the arbitrator, it is understandable that this one item may not have received sufficient consideration.

Mrs. Oliveira purchased a hot tub/home spa costing $5,399.25, (the terms, home spa, whirlpool or hot tub were used interchangeably on appeal to denote a bath with the ability to circulate water or air bubbles with an air jet). Dr. Merskey apparently first suggested a hot tub to Mrs. Oliveira, although his recommendation was not set out in his reports. Mrs. Oliviera’s family doctor endorsed the recommendation in a brief prescription note, stating that “the above patient requires “hot tub” facilities re her fibromyalgia post MVA”. Dr. Goldenberg, Zurich’s expert, disagreed stating that a hot tub would not be beneficial because it did not encourage her to remain active.

The arbitrator accepted the therapeutic value of hot tub therapy in general, but did not consider the cost of the home spa reasonable or necessary in Mrs. Oliveira’s case. He found that Mrs. Oliveira had never tried a hot tub or similar activity and could not say whether, and to what extent, it benefited her. The arbitrator thought that she should have investigated whether the modality helped her before she went to the considerable expense of purchasing her own hot tub:

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

(Decision, page 11)

Mrs. Oliveira has spent a considerable amount of money on the strength of her doctors’ suggestions. However, this fact alone does not make Zurich liable for the cost. An insurer is responsible for payment only if the expense is reasonable and required.

While it may not have application in every case, the arbitrator’s overall approach in this case does not strike me as unreasonable or unduly onerous. A claimant, acting sensibly and prudently, can be expected to undertake some investigation before embarking on a purchase of this nature and magnitude. Claimants who simply go ahead, without reasonably considering their options and also taking steps to ascertain the insurer’s view of the expense, run a risk that they may ultimately have to bear the cost of the expense themselves. It may not be a sufficient answer to say that they were simply following doctors’ orders; it is certainly not enough to say that the money has already been spent.

Mrs. Oliveira doctors opinions about the need for a hot tub were expressed in very general terms. There is conflicting medical opinion in the form of Dr. Goldenberg’s report. The arbitrator had the benefit of hearing Mrs. Oliveira’s testimony and of considering the medical evidence in the light of the evidence as a whole. He is in the best position to assess the necessity and reasonableness of the expense and I find no basis to interfere with his approach or with his determination here.

Even if I were to agree that the arbitrator erred in concluding that Mrs. Oliveira did not require her own hot tub, I am in no position to decide whether the particular purchase she made, which on its face is considerable, was reasonable. Therefore, Mrs. Oliveira’s appeal of this order is dismissed.

Ms. Oliveira also claimed the cost of some home exercise equipment. The arbitrator allowed the cost of an exercise bicycle and an exercise bench, but denied the cost of dumbbells and ankle weights on the basis that these items were unsupported by medical evidence. The equipment in dispute was apparently recommended by Mrs. Oliveira’s physiotherapist, but Dr. Merskey, in his testimony, was uncertain about its utility in her case. A review of the arbitration record supports the arbitrator’s conclusion.

Mrs. Oliveira argued that it was inconsistent for the arbitrator to allow some home exercise equipment but to reject other expenses for rehabilitation at home, including the hot tub. I see no inconsistency in the arbitrator’s approach. It was open to him, based on his assessment of all the evidence, to determine that some items were required or reasonable while others were not. He is not required to accept or reject Ms. Oliveira’s claim in its entirety.

Mrs. Oliveira also claimed a number of small implements and devices, which had been recommended in the course of an occupational home assessment on July 14, 1994. A list of the items included such implements as a long handled bath sponge and foot brush, zipper pull, bread slicer, several knives and a paring board.

The arbitrator disallowed most of the items. He felt that there was insufficient medical evidence that they were needed. He took into consideration the fact that the implements had been recommended by an occupational therapist, rather than by a health care provider authorised to verify Mrs. Oliveira’s requirements under subsection 6(4) of the Schedule. In his view, although Dr. Merskey testified that the items in general were reasonably necessary, he was not specific enough about the need for each of them, individually.

Mrs. Oliveira’s objection to the arbitrator’s determination goes to the weight he attributed to the occupational therapist’s report and Dr. Merskey’s brief testimony on point. The arbitrator did not exclude the claim because it was not supported by a statement from a prescribed health professional. This clearly would have been wrong in the absence of a request for such a statement. However, he attributed less weight to the occupational therapist’s views because she was not qualified to give an opinion on the necessity of the items under subsection 6(4). He concluded that Mrs. Oliveira “had not presented sufficient medical evidence to prove that they are reasonably necessary for her treatment or rehabilitation”. I find no reason to interfere with the arbitrator’s assessment of the evidence before him.

However, Mrs. Oliveira’s appeal of the arbitrator’s refusal to award her the cost of the electric bed, in my view, is well-founded. Mr. Oliveira bought the bed, which has a motor that moves it into different positions, on Dr. Merskey’s recommendation. It cost her $1,899.00. Dr. Merskey testified that, because of her condition, Mrs. Oliveira had a great deal of difficulty sleeping. Her lack of sleep reduced her ability to tolerate pain during the day, thereby reinforcing the cycle of disability. Mrs. Oliveira’s difficulties were increased by her right shoulder impingement syndrome, which imposed additional limitations on the sleeping positions she could assume. Dr. Merskey expanded on why Mrs. Oliveira needed the electric bed:

When people have chronic back pain, it is often essential, to get through the night, to be able to alter the arrangements of a bed. If you don’t have an electric bed, you do it with pillows or with some other bolster either under the knees or at the back or two at the side, or sometimes between the legs. And apart from the item between the legs, there is no question that with chronic neck and back painaltering the angle of different parts of the body to each other during the night is liable to relieve pain. It’s even necessary to be able to adjust the bed electrically or non-manually before getting into it. It can be, obviously, quite a trial to set up the pillows and other things if one doesn’t have an electric bed. So I see this as something that takes a great significant portion of the discomfort away.

(Transcript, p. 18. Para 4-16)

In a brief prescription note, Mrs. Oliveira’s family doctor supported the purchase of an electric bed. Dr. Goldenberg recommended against it on the basis that Mrs. Oliveira should be encouraged to remain active. However, he did not specifically address Dr. Merskey’s comments.

The arbitrator was not satisfied that an electric bed was necessary or reasonable. He concluded that while it offered Mrs. Oliveira more comfort, it was not necessary because there was no evidence to suggest that she could not change positions on her own.

In my view, the arbitrator adopted the wrong approach to the question before him. A claimant need not show that an item is absolutely indispensable in order to be entitled to recover it. Mrs. Oliveira’s physical ability to change positions while lying down is undoubtedly a factor to be considered, but it is not the only factor.

The doctors, including the consultant appointed by Zurich, agree that Mrs. Oliveira’s fibromyalgia is severe. The medical reports record her sleeping problems and the difficulty she experiences finding a comfortable position at night. The evidence before the arbitrator was that an electric bed would significantly help Mrs. Oliveira to set up the bed initially and make it easier for her to change position in bed. In turn, better rest would increase her capacity to manage her pain during the day and potentially help in the restoration of some of her functional capacities through a higher pain threshold. In the particular circumstances of Mrs. Oliveira’s case, I am persuaded that the electric bed was reasonably required for her rehabilitation and was a reasonable expense.

Therefore, the arbitrator’s order in respect to this claim is revoked and an order entitling her to the cost of the bed, together with interest, substituted.

Mrs. Oliveira claimed the cost of a TENS unit, which Zurich apparently agreed to pay at the start of the arbitration hearing. Mrs. Oliveira complained that the arbitrator’s order should have included a direction requiring Zurich to pay for the equipment, as agreed. I have no evidence as to the arrangements made by the parties, or, indeed, whether there is any real dispute as to their implementation. Therefore, I am not prepared to deal with this issue.

III. REPLACEMENT FARM LABOUR

Mrs. Oliveira has been unable to work on the farm since the accident. Her husband worked hard to make up for her absence but other people had to be hired to help with the farm work. According to their evidence, Mr. and Mrs. Oliveira spent $38, 265.86 on extra farm help between 1991 and 1993. Despite Mrs. Oliviera’s absence and the additional labour costs, the farm made more money after the accident than before. Mrs. Oliveira claimed the additional labour costs from Zurich.

The Schedule, in Part IV, provides compensation in the form of earnings-related weekly income benefits for injured earners when they are unable to return to their essential job tasks or, after 156 weeks, to other suitable work. The benefits are subject to a minimum and maximum. There is no extra compensation if the business has to absorb additional labour costs. After-accident income is deducted, net of such costs, under section 15. Parties have looked elsewhere in the Schedule to find a source of compensation for replacement labour costs. As here, this has generally been framed as a claim under subsection 6(1)(f).

In a number of arbitration decisions, beginning with Zehr and The Guarantee Company of North America, (July 30, 1993, OIC File A-001963),¹ arbitrators have held that the cost of replacement labour is not a supplementary medical or rehabilitation expense under this subsection, because there is an insufficient connection between the expense and the person’s rehabilitation requirements. In this case, the arbitrator followed the reasoning in Zehr, and rejected Mrs. Oliveira’s claim.

The Zehr case involved very similar facts. Mr. Zehr worked on the family farm. After his accident, he had to hire other farm hands to do his heavy work and claimed the extra labour costs under section 6(1)(f). The arbitrator found that his disability was of indefinite duration. She ruled that there had to be a treatment or rehabilitation nexus in order for an expense to be recoverable. She characterised the labour costs as business expenses necessary to keep the business operating, rather than an expense related to Mr. Zehr’s rehabilitation needs:

I heard no evidence that the work of the hired farm workers will facilitate Mr. Zehr’s rehabilitation, except by allowing Mr. Zehr to avoid the restricted activities. This goal could be achieved without Mr. Zehr hiring others to replace his labour. Mr. Zehr’s testimony was that he hired farm workers in order to keep the farm going during the period of his disability. Though this is an admirable goal, it does not relate to Mr. Zehr’s rehabilitation, however broadly defined, under section 6. The decision to keep the farm going was a business decision. The hired farm workers are not helping Mr. Zehr to perform the heavy farm work, supplementing his work, retraining him, or helping in his physical or vocational rehabilitation. They are replacing Mr. Zehr’s labour.

(Decision, page 15)

I agree that an injured person’s treatment and rehabilitation needs are the primary focus of section 6. Goods or services are only compensable under section 6(1)(f) if they are required because of the accident and they are necessary in light of the insured’s treatment or 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. ²

On appeal, Mrs. Oliviera submitted that the arbitrator was wrong in concluding that the labour services were not necessary for her rehabilitation. She argued that the reasoning in Zehr was too restrictive. She relied upon Dr. Merskey’s evidence, who testified at the hearing as follows:

Q. If this expense had not been incurred and Mrs. Oliveira was obliged to continue to carry on the labour after the accident that she engaged in before the accident, do you have an opinion as to whether that would have adversely affected her care and management?

A. Yes...It would have directly affected her care and management because it would have severely exacerbated her pain, to the extent that she could even do it. ...She might not have managed to get through it...I think she would have been stopped by the severity of the pain.

(Transcript, page 27)

Mrs. Oliveira’s position is that had she not hired someone else to do her work, she would have had to do it herself, either exacerbating her injuries or, most probably, failing altogether. While the argument has a practical dimension, it does not make the expense one that is needed for Mrs. Oliveira’s rehabilitation and must also be viewed in the context of the purpose of weekly income benefits. The choice of hiring someone to replace Mrs. Oliveira’s work does not advance or promote her ability to do the work herself or help restore her level of functioning. The arbitrator in Zehr acknowledged that the result might be different if someone was hired to help the injured person perform the work herself. However, that is not the situation here. As in Zehr, the additional labour was hired to replace Mrs. Oliveira’s work, not to restore her to it. The decision to hire other workers was essentially a business decision, not a decision driven by Mrs. Oliveira’s own rehabilitation needs.

Obviously, there are consequences for Mrs. Oliveira’s recovery. Recovery and rehabilitation are affected by a number of factors, medical and non-medical: the family’s financial situation and the outlook for the family farm may well affect her overall state of mind and influence her recovery. However, that is not a sufficient connection to bring the services claimed within subsection 6. They must be a reasonably necessary rehabilitation measure.

I remain unconvinced by the brief submissions I received that the analysis in Zehr is wrong. It has been held in many cases that the purpose of section 6 is to meet the insured’s own rehabilitation needs, not to replace the services he or she performed or to compensate family members for the loss of the person’s services. While the line between rehabilitation needs and replacement of services may often be a fine one,³ I agree with the arbitrator that the facts of this case are on all fours with Zehr, and fall outside the scope of the section. Mrs. Oliveira’s appeal in this regard is denied.

IV. DEDUCTION OF CPP BENEFITS

Mrs. Oliveira was awarded CPP disability benefits which must be taken into account in calculating her weekly income benefits. She accepts that her CPP benefits are deductible, but takes issue with the arbitrator’s calculations and order. The arbitration record is rather confusing on this issue. The exhibits do not set out Mrs. Oliveira’s CPP entitlement for 1991 and 1992,⁴ and Mrs. Oliveira did not provide me with any additional evidence about payments for this period. On appeal, she filed a letter from the federal Income Security Programs Branch, which showed CPP benefits of $501.12 a month in 1994, $503.63 in 1995, and $512.70 a month in 1996.

On page 7 of his decision, the arbitrator found that Mrs. Oliveira started receiving CPP benefits of $491.81 a month on March 1, 1992, which were raised to $501.12 a month as of January 1, 1994.

However, in his table of calculations and subsequent order,⁵ he deducted CPP benefits from Mrs. Oliveira’s weekly income benefits retroactively starting January 1, 1991, and increased the amount to be deducted as of January 1, 1993 rather than 1994.

I agree that there seems to be an inconsistency between the arbitrator’s findings, and the numbers set out in his order, as taken from the summary calculation table. The apparent inconsistency supports Mrs. Oliveira’s contention that an error was made in the calculation table and order.

I have some reservations about interfering with the arbitrator’s order on the basis of the meagre evidence before me. As suggested by Zurich’s counsel, Mrs. Oliveria’s CPP payments presumably, could have been easily confirmed through inquiries to the appropriate federal agency. This would have probably avoided the need for an appeal on this issue. Despite this, however, I am persuaded that the arbitrator’s order does not, on its face, reflect his findings. It makes little sense, especially given the protracted length of the proceedings between these parties, to defer dealing with this issue. Therefore, the arbitrator’s order is varied as follows:

In calculating Mrs. Olivera’s weekly income benefits, Zurich is entitled to deduct CPP payments of $491.81 a month, starting on March 1, 1992 until December 31, 1993; $501.12 a month in 1994; $503.63 a month in 1995 and $512.70 a month in 1996.

The amount of weekly income benfits set out in paragraph 1 of the the arbitrator’s order, dated April 21, 1995, should be adjusted accordingly.

I trust the parties can work out the appropriate deductions between them, based on these adjusted figures and the formula set out in the arbitrator’s reasons, together with interest.

V. EXPENSES

Mrs. Oliveira’s claim has succeeded in part and I grant her reasonable appeal expenses, including the cost of preparing a transcript of Dr. Merskey’s testimony. These expenses should be relatively modest as the matter was dealt with by way of written submissions only. If the parties cannot agree on the amount of expenses, they may apply to the Registrar to arrange an assessment.

September 12, 1996

Susan Naylor Director’s Delegate

Date

Footnotes

1. 1See also e.g. Saini and Wellington Insurance Company, (March 18, 1994, OIC A-001515), appeal pending; Meandro and Pilot Insurance Company, (July 6, 1994, OIL A-004433); Odysseos and CUMIN General Insurance Company, (September 22, 1994, OIL A-005858); Henri and Allstate Insurance Company, (August 16, 1996, OIC A-007954).
2. 2Plows (supra), page 14.
3. 3Caputo and Wellington Insurance Company, (June 23, 1994, OIC A-00697), upheld on appeal, (July 25, 1996, OIC P-00697); Chamale and Wellington Insurance Company, (September 25, 1992, OIC A-000849) upheld on appeal (July 9, 1996, OIC P-000849).
4. 4The Notice of Entitlement issued by Health and Welfare Canada, marked Exhibit 14, indicates entitlement to CPP benefits only from January 1, 1993, a date later than either the arbitrator or Mrs. Oliveira’s counsel have used. However, the evidence before me may not be complete on the point. decision.
5. 5The arbitrator’s findings are on page 7, the table of calculations on page 9 and his order on page 15, of his decision.