GAN Company of Canada, Ltd. v. Selewa Younathan, 1997 ONICDRG 144

OFFICE OF THE DIRECTOR OF ARBITRATIONS

Neutral Citation: 1997 ONICDRG 144

Appeal P96-00088

GAN COMPANY OF CANADA, LTD. (formerly known as SIMCOE & ERIE GENERAL INSURANCE COMPANY) Appellant

and

SELEWA YOUNATHAN Respondent

Before: David R. Draper, Director’s Delegate

Counsel: Larry J. Kielbowich (for GAN) David E. Ivey (for Selewa Younathan)

APPEAL ORDER

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

1. The appeal is dismissed and the arbitration order dated December 4, 1996 is confirmed.

2. Selewa Younathan is entitled to his reasonable appeal expenses, payable by GAN Company of Canada, Ltd.

July 29, 1997

David R. Draper Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by GAN Company of Canada, Ltd. (“GAN”) from an arbitration decision dated December 4, 1996. GAN claims that the arbitrator erred in concluding that Mr. Younathan was entitled to weekly income benefits from July 13, 1994, in calculating the proper amount of those benefits, and in failing to award interest on the amount GAN had overpaid.

II. BACKGROUND

Mr. Younathan started driving a cab in 1979. He continued until July 20, 1990, when he was injured in an automobile accident. After attempting to return to work in November and December 1990, he stopped driving his cab permanently. On January 23, 1991, he was involved in a second automobile accident and has not worked since.

GAN paid Mr. Younathan weekly income benefits under section 12(1) of Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (“the Schedule”). However, it stopped paying on July 13, 1994 on the basis that he did not meet the post-156 week test in section 12(5)(b) of the Schedule. The weekly amount paid by GAN varied, but the arbitrator found that Mr. Younathan received a total of $113,690.00, or approximately $552 per week.

Mr. Younathan applied for mediation, claiming he was entitled to ongoing weekly income benefits. GAN argued that he had already been overpaid. It claimed he was not entitled to any weekly income benefits after the 156-week mark and the weekly amount he received was too high.

After an unsuccessful attempt at a mediated resolution, Mr. Younathan applied for arbitration. The arbitrator described the issues as follows:

1. Is Mr. Younathan entitled to weekly income benefits from July 13, 1994?

2. What is the amount of his weekly income benefit?

3. Is GAN entitled to a repayment of benefits?

4. Is Mr. Younathan entitled to a special award?

Mr. Younathan also claims interest on any amounts owing, and his expenses incurred in the hearing.

The arbitration hearing took place over six days, starting in late 1995 and ending in March 1996. Extensive medical, rehabilitation and accounting documents were filed. Five witnesses were called, including Mr. Younathan, a vocational consultant, two accountants and the Manager of GAN’s Accident Benefits Unit.

The arbitrator concluded that Mr. Younathan met the post-156 test. However, he did not order GAN to reinstate weekly income benefits from the date of termination. This was because he also concluded that Mr. Younathan was paid at a rate higher than his weekly entitlement, resulting in an overpayment of $46,526.95. Therefore, the arbitrator ordered that weekly income benefits be resumed on November 4, 1996 at the correct rate of $385.00 per week. He did not order GAN to pay a special award, or interest on any overdue payments. Finally, he awarded Mr. Younathan his arbitration expenses.

III. ANALYSIS

GAN accepts that my role on appeal is not to second-guess the arbitrator’s assessment of the evidence. It submits, however, that he erred in applying the law to the facts of this case, resulting in an injustice. For the following reasons, I am not persuaded that there is any basis for disturbing the arbitrator’s order.

A. Entitlement

The test for receiving weekly income benefits becomes stricter after 156 weeks. The focus expands from the type of work the person was doing at the time of the accident to include other “suitable” work. Section 12(5)(b) of the Schedule relieves the insurer from paying weekly income benefits after 156 weeks unless the insured person establishes that he or she is continuously prevented from “engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.”

At the arbitration hearing, GAN accepted that Mr. Younathan could not return to work as a cab driver, but claimed there were suitable alternatives. The arbitrator considered each party’s burden of proof, following the earlier decisions in Murray and Wawanesa Mutual Insurance Company, (August 23, 1996, OIC A-003224) and Caruso and Guarantee Company of North America, (May 9, 1996, OIC A-006856). He found that Mr. Younathan was not totally disabled and, therefore, had to show he had pursued some type of suitable employment, but was unable to do the work because of his accident-related injuries.

GAN does not object to the arbitrator’s analysis of the burden of proof, but claims that he erred in finding that Mr. Younathan met his onus. In particular, GAN argues that he was capable of working as a taxi dispatcher, but made no effort to pursue that kind of work.

In my view, the arbitrator properly considered the evidence in context. Every case involves decisions about the insured person’s rehabilitation goals and how to reach them. These decisions may turn out to be unproductive. However, if they were reasonable at the time, particularly if the parties agreed, it would be unfair to penalize the insured person for his or her lack of success. Therefore, the insurer should be limited in its ability to rely on hindsight to argue that the insured person could be back at work if only a different rehabilitation plan had been pursued. While the cases are distinguishable, I addressed this concern in Gagnon and Jevco Insurance Company, (June 9, 1997, OIC P96-00052):

It is unfair to take an insured person down a particular rehabilitation path and then expect him to justify why a list of other options could not have been pursued. As arbitrators have said in a number of decisions, the insured person is not required to prove that he or she is unable to do each and every potentially suitable type of work.

GAN involved two different rehabilitation companies to assist Mr. Younathan. However, work as a taxi dispatcher was never established as the rehabilitation goal. It was one of 73 jobs generated by a computerized labour market assessment in August 1993, three years after his first accident. The rehabilitation company narrowed the list to 20 jobs, including taxi dispatcher, it felt “should prove useful in assisting the claimant [Mr. Younathan] to identify occupational areas which he may be interested in exploring further and is physically able to perform.” At that point, however, the rehabilitation company closed its file and, as a result, did not help Mr. Younathan assess or investigate the options any further.

GAN points to the arbitrator’s statement that he was not convinced that Mr. Younathan investigated working as a taxi dispatcher to any great extent. However, the arbitrator found that he made other reasonable efforts. At page 23, he states:

I find that Mr. Younathan has made these kinds of bona fide efforts, mainly by trying to identify and train himself for these types of occupations. He took some computing courses, with mixed success. He tried to obtain a certificate from H&R Block, but failed. He tried to obtain a mechanic’s licence to make himself more acceptable to Petro Canada, but failed. He investigated some self-employment business ventures, but failed to identify a suitable business.

There is ample evidence to support these findings. Therefore, I agree with the arbitrator that the fact that Mr. Younathan did not pursue one of the many options presented to him is not fatal to his claim.

GAN objects to the arbitrator’s reference to the job market. Although entitlement to weekly income benefits is not based on whether an appropriate job is available, vocational rehabilitation must depend on the job market. Retraining expenses become unreasonable if there is little prospect of employment. In my view, the arbitrator referred to the low demand for taxi dispatchers, at least in part, to explain why Mr. Younathan chose to pursue other options. This was not an error.

After reviewing the appeal record, including a full transcript of the arbitration hearing, I am not persuaded that the arbitrator erred. In my view, the decision reflects a careful review of the relevant evidence. The arbitrator’s findings and conclusions were available to him based on the evidence and, therefore, I have no basis for interfering.

B. Quantum

GAN submits that the arbitrator erred in ordering that the proper amount of Mr. Younathan’s weekly income benefits is $385. In my view, he approached the issue properly. He was faced with questions about Mr. Younathan’s financial records and differing expert opinions on how to deal with them. He evaluated the evidence, including the expert evidence, and reached his own conclusion.

GAN claims that Mr. Younathan failed to establish his pre-accident income and, therefore, should have been limited to the minimum amount of $185.60 per week. While I accept that the minimum rate is appropriate where an applicant fails to establish that his or her pre-accident income was more than $232.00 per week, it is not appropriate simply because the pre-accident income cannot be determined with precision. If an applicant can establish on a balance of probabilities that his or her income was at least a certain amount, that amount should be used, not $232.00.

In this case, the arbitrator was not prepared to rely on some of Mr. Younathan’s financial information. Quite properly, however, he did not reject all of his evidence simply because some of it was unreliable. He evaluated the evidence and found a sufficient basis to make the calculation. Assessing evidence is the core part of an arbitrator’s job and in the absence of a clear error, I am not prepared to interfere. I find no such error here.

GAN submits in the alternative that the arbitrator exceeded his jurisdiction by doing his own calculation. The suggestion is that he should have chosen the opinion of one expert or the other. I do not agree. The arbitrator must decide the proper amount of the person’s benefits based on the evidence. Expert evidence must be evaluated like any other evidence. The arbitrator can accept all, none or part of it. Subject only to questions of fairness, the result in a quantum case is not restricted to the amounts presented by the parties. The arbitrator gave reasons for his conclusion that are supported by the evidence. Therefore, this part of the appeal is dismissed.

C. Interest

GAN submits that the arbitrator erred in not awarding interest on the overpayment. It relies on section 27(4) of the Schedule, which states that the insurer may charge interest from the day the amount owing is determined.

One difficulty is that the arbitration decision does not specifically address this issue. This may be because it was not raised in the opening statement or closing arguments, although it was claimed in GAN’s Response to Application for Arbitration. For the following reasons, however, I am not persuaded that it was an oversight or that I should award interest on appeal.

Arbitrators can and should make a sensible order arising from the issues before them. The arbitrator here was dealing with a number of questions about the amount owing. He could have ordered Mr. Younathan to repay the difference between the weekly rate paid and the proper amount, plus interest at the bank rate under section 27 of the Schedule. After eliminating the overpayment, however, GAN would have owed Mr. Younathan weekly income benefits from the date of termination. This would have involved an order that GAN pay benefits from the date of termination to the decision, a period of more than two years, plus interest at 2 per cent per month under section 24 of the Schedule.

Instead, the arbitrator gave GAN credit for the amount it had already paid, allowing it to set-off the overpayment against the additional weekly income benefits it was obliged to pay, with no interest to either party. In my view, this was within the arbitrator’s authority and was a sensible order in the circumstances. Therefore, I am not prepared to interfere.

IV. APPEAL EXPENSES

Mr. Younathan was successful in resisting GAN’s appeal and, therefore, should receive his reasonable appeal expenses.

July 29, 1997

David R. Draper Director’s Delegate

Date