Nelson Henriques v. Motor Vehicle Accident Claims Fund, 1997 ONICDRG 160

Neutral Citation: 1997 ONICDRG 160

Appeal P97-00002

Appellant

and

Respondent

Before: David R. Draper, Director's Delegate

Counsel: David S. Wilson (for Nelson Henriques) David S. Young (for Motor Vehicle Accident Claims Fund)

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

The appeal is dismissed and the arbitration order, dated December 12, 1996, is confirmed.
No appeal expenses are payable.

August 21, 1997

David R. Draper Director's Delegate

Date

I. NATURE OF THE APPEAL

This is an appeal by Nelson Henriques from an arbitration order dated December 12, 1996. The arbitrator concluded that Mr. Henriques was not entitled to weekly income benefits after November 5, 1994 because he did not meet the post-156 week test in section 12(5)(b) of Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 ("the Schedule").

II. BACKGROUND

Mr. Henriques fractured his left hip and leg in a motorcycle accident on June 27, 1990, just after the Schedule came into effect. At that time, he was almost 19 years old. For the past three months, he had been working as an unskilled labourer with a crew building cement sidewalks. He did not know how long the job would last.

Within days of the accident, Mr. Henriques underwent surgery on his hip and leg. He was discharged to a rehabilitation hospital, where he spent five months in rehabilitation. In April 1991, Mr. Henriques went to Portugal to live with his parents. By the following Spring, he was experiencing pain around his left hip. He returned to see Dr. J.R. Davey, who did the initial surgeries. In August 1992, two years after the accident, Dr. Davey did a hip replacement operation - "a left cementless total hip replacement." After convalescing, Mr. Henriques went back to Portugal, returning to Canada occasionally for medical care.

The doctors agree that Mr. Henriques' injuries restrict his activities. Although his hip replacement makes it possible for him to do virtually everything he did before the accident, he has been advised that to prolong the life of the hip replacement, he should avoid certain activities, such as repetitive lifting, squatting and bending. The problem is that his pre-accident work involved precisely these activities.

Mr. Henriques also has problems with his left foot. The arbitrator found that he sometimes trips due to a "partial foot drop" and has to be careful to lift his foot fully when climbing stairs. The foot drop prevents Mr. Henriques from running, although he should not be running in any event due to his hip replacement. Dr. Davey describes the foot problem as a partial sciatic nerve palsy secondary to the hip fracture. He regards it permanent, but not disabling.

The Motor Vehicle Accident Claims Fund ("MVAC") paid weekly income benefits under section 12(1) of the Schedule on the basis that Mr. Henriques was unable to return to his pre-accident work in construction. Because he earned an average of $1,092.49 in the four weeks before the accident, he qualified for the maximum of $600 per week.

According to section 12(5)(b) of the Schedule, the test for weekly income benefits becomes stricter after 156 weeks:

- (5) The insurer is not required to pay a weekly benefit under subsection (1),

(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience. [emphasis added]

MVAC did not terminate Mr. Henriques' weekly income benefits at the 156-week mark, but continued paying until November 5, 1994, another 16 months. After his benefits were terminated, Mr. Henriques applied for mediation, claiming he was still unable to engage in any suitable work. In December 1995, eight months after the mediation failed, he applied for arbitration. At the pre-hearing, he clarified his position that because MVAC paid weekly income benefits beyond 156-weeks, it had the onus of showing he was no longer entitled.

The arbitration hearing took place over three days in November 1996, with testimony from Mr. Henriques and six medical and rehabilitation professionals. In a decision dated December 12, 1996, the arbitrator concluded that Mr. Henriques was not entitled to further weekly income benefits under section 12(5)(b). At page 18 of the decision, he states:

I find that the injuries Mr. Henriques suffered do not continuously prevent him from engaging in the following employment: driver making light deliveries, gas bar attendant, frame and mirror assembler, light assembler, light fixture assembler and printed board assembler. I am satisfied that these jobs are the type of sedentary work with some walking and climbing recommended by Dr. Davey and that these jobs will not unreasonably shorten the life of Mr. Henriques' artificial hip. Having regard to the nature and status of the work Mr. Henriques did before the accident, the various amounts Mr. Henriques earned from that work in Canada and Portugal, Mr. Henriques' limited employment experience, his youth and lack of skills and education, I am satisfied that he is reasonably suited by education, training and experience for these jobs.

Mr. Henriques appeals, claiming that the arbitrator erred in two major respects. First, he failed to adequately consider the consequences of MVAC paying weekly income benefits beyond the 156-week mark. Second, he misapplied the criteria in section 12(5)(b) by considering alternative work that was not reasonably suitable.

III. ANALYSIS

A. Is this appeal restricted to questions of law?

The Automobile Insurance Rate Stability Act, 1996 (Bill 59) amended the Insurance Act, effective November 1, 1996. One amendment limited appeals to questions of law by repealing subsection 283(1) and substituting the following:

- (1) A party to an arbitration under section 282 may appeal the order of the arbitrator to the Director on a question of law.

This provision was not argued by MVAC, but was raised by Mr. Henriques' counsel at the end of the hearing. He argued, however, that subsection 283(1) does not apply to this appeal because it is not merely a procedural change and, therefore, should not be applied retrospectively. In support of this argument, counsel referred to the arbitration decisions dealing with changes to the expense provisions.¹

At the appeal hearing, I heard only brief submissions on this issue. Although the parties were given the option of filing written submissions, they chose not to do so. Based on the limited material available to me, I accept Mr. Henriques' position.

The general rule is that the presumption against retrospective operation does not apply to statutory amendments that are merely procedural. The question is whether an amendment restricting appeals is procedural or substantive. The references I have consulted strongly suggest that appeal rights are substantive. In "Practice and Procedure Before Administrative Tribunals," Robert Macaulay states:

A substantive enactment is one which gives one a right. A right of appeal is a substantive right and thus a change in the law abolishing or creating an appeal right would not apply to a proceeding which is already underway unless the legislation in question expressly so provided. [p.12-141, footnotes omitted]

Similarly, the Canadian Encyclopedic Digest (Ont.) (3d) includes the following in Part IV, "Operation of Statutes" (footnotes omitted):

§272 A right of appeal is a remedial right, and the courts have frequently had to consider the question of whether a statute giving or taking away a right of appeal should prima facie be construed as affecting the parties to pending litigation. If such statutes are to be regarded as regulating procedure only within the meaning of this exception, then prima facie their application would not be restricted to proceedings subsequently instituted. Speaking broadly, the courts have persistently refused to take this view of such statutes; they have almost uniformly been held not to fall within the category of statutes relating to procedure only.

The decision of the Divisional Court in Petrofina Canada Ltd. v. Lynn (1978), 1978 CanLII 1734 (ON HCJ), 19 O.R. (2d) 97, is particularly relevant. In that case, a Small Claims Court trial ended on November 22, 1997, but judgment was reserved. Three days later, an amendment to the Small Claims Court Act came into force, limiting appeals to decisions in which the claim in dispute exceeded $500. On December 20, 1977, after the amendment was in force, judgment was delivered awarding the plaintiff $400. The defendant appealed the decision. The plaintiff moved to quash the appeal, relying on the new appeal section. The Divisional Court dismissed the plaintiff’s motion, holding that the right of appeal was substantive and nothing in the amending legislation made it retrospective.

The arbitration hearing in this case took place after the appeal section was amended. It might be argued, therefore, that Petrofina is distinguishable. However, Mr. Justice Griffiths, in his concurring reasons, specifically addressed the question of when the right to appeal arises. He rejected the argument that the defendant's right to appeal did not arise until judgment was issued, holding that "the right of appeal . . . vests in the parties at the time of the commencement of the action."

Relying on these sources, I conclude that because Mr. Henriques' applied for arbitration before November 1, 1996, his appeal is not restricted to questions of law.

B. Burden of proof

Although he did not regard it as essential to his decision, the arbitrator responded to the parties' submissions about the burden of proof in post-156 week cases. He dealt with the distinction between legal and evidentiary burdens of proof, concluding that the legal burden is on the insured person to prove he is continuously prevented from engaging in suitable employment. He also concluded that the evidentiary burden is on the insured person. However, if the insurer claims there is specific, suitable employment the insured person can do, it has the evidentiary burden of providing evidence to prove that point. If the insurer meets that evidentiary burden, the obligation shifts to the insured person to present evidence to refute the assertion.

The arbitrator also dealt with Mr. Henriques' argument that MVAC conceded his disability by paying weekly income benefits beyond the 156-week mark and, therefore, had an additional burden of proving that his condition had changed since the decision was made to pay benefits. He found "little merit" in this argument, stating as follows:

If accepted, this argument would discourage insurers from making payment because, in nearly every case, evidence of payment would cast upon the insurer the burden of proving that the insured was not entitled to further payments. However, even if the duration of payments casts an evidential burden on the Insurer in this case, the Insurer satisfied it by explaining that it terminated weekly benefits after four and a half years on November 6, 1994 as a result of assessments which were conducted in September 1994. (Decision, p.14)

The arbitrator went on to say that although he addressed the burden of proof issues, this was not a case where he was left in a state of uncertainty. At page 14 of the decision, he states that he " could make findings on the various evidential issues without having to consider who had the burden of proof." Mr. Henriques accepts that this assessment of the evidence makes much of the burden of proof analysis unnecessary. He submits, however, that the arbitrator erred in failing to deal adequately with the consequences of MVAC paying benefits beyond the 156-week mark.

Like the arbitrator, I find little merit in this argument, particularly in the context of this case. Counsel argued that the onus should shift to the insurer because an insured person might rely on the payment of benefits to his or her detriment. For example, he or she might not pursue retraining on the understanding that the insurer accepted that it was premature. However, this was a general submission. There was no suggestion that Mr. Henriques suffered any such prejudice.

Entitlement to weekly benefits is an ongoing issue, with the onus on the insured person. The evidence required to meet this onus, however, will vary in each case. Where there is no contrary information, a medical form from the family doctor may be sufficient. If entitlement is less clear, however, the insurer can ask for additional information or require an examination under section 23(2) of the Schedule. Beyond the initial application, however, there is no rigid formula to determine which party must present what type evidence at various points along the way.

The Schedule creates an obligation on insurers to pay benefits promptly, with penalties if they do not. As a result, insurers will often pay benefits where entitlement is uncertain. However, if the insurer concludes that ongoing entitlement has not been established, it can terminate the person's weekly benefits. The mere fact that it paid benefits does not shift the onus to the insurer. It is the nature and strength of the evidence, not the payment of benefits, that shifts the evidentiary burden.

In this case, there was little dispute about Mr. Henriques' disability. It was agreed that he had permanent physical restrictions, making heavy physical jobs inappropriate. The question was whether he was capable of engaging in suitable alternative work. MVAC continued to pay weekly income benefits until November 6, 1994, claiming that by then, he no longer met the post-156 week test. Although there was some suggestion that his entitlement might have ended earlier, MVAC did not claim an overpayment.

The arbitrator found nothing inappropriate about MVAC's actions. Neither do I. Even if there was sufficient evidence to establish Mr. Henriques' entitlement until the Fall of 1994, MVAC was entitled to reevaluate its position based on more recent information.

Mr. Henriques specifically objects to the arbitrator's statement, set out above, that MVAC explained that it terminated benefits based on assessments done in September 1994. In his submission, MVAC could not have explained its decision because none of its representatives testified at the arbitration hearing. On appeal, I allowed Mr. Henriques to file an affidavit from his lawyer, stating there was no evidence that MVAC terminated weekly income benefits based on assessments done in September 1994.

I am not persuaded that the arbitrator erred. It is clear that assessments were done in or about September 1994. The arbitration exhibits include two reports from Workable Centres Inc., dated September 21, 1994 and October 5, 1994.² While there may not have been direct evidence that MVAC relied on these reports to terminate benefits, the arbitrator was responding to Mr. Henriques' argument that the termination was arbitrary. I see no reason that he could not rely on the reports to conclude there was a reasonable basis for the termination.

C. The post-156 week test

The arbitrator concluded that by November 5, 1994, the date weekly income benefits were terminated, Mr. Henriques no longer met the post-156 week test in section 12(5)(b) of the Schedule. In other words, his accident-related injuries did not continuously prevent him from engaging in some employment or occupation reasonably suitable for him based on his education, training or experience. The arbitrator specifically identified a number of jobs that he found suitable: driver making light deliveries, gas bar attendant, frame and mirror assembler, light assembler, light fixture assembler and printed circuit board assembler.

As stated in many previous decisions, my role on appeal is not to second-guess the arbitrator's assessment of the evidence. He had the advantage of hearing the witnesses, including Mr. Henriques and the key medical professionals. There is no transcript of the arbitration hearing. As a result, the arbitrator was in a far better position to evaluate all the evidence. The question, therefore, is whether he erred in some respect sufficiently serious that the decision should not be allowed to stand.

After reviewing the appeal record and the parties' submissions, I find no reason to disturb the arbitrator's order. There was ample evidence to support his findings, including his statement on page 14 of the decision that this was not a borderline case.

In April 1993, shortly before the 156-week mark, Dr. Davey reported on Mr. Henriques' condition.³ He did not suggest that Mr. Henriques could not return to work. He only advised that to prolong the life of the hip replacement, the work should not involve "any heavy lifting, repetitive squatting or bending or working at heights."

In November 1993, Dr. Edwin P. Urovitz, an orthopaedic surgeon retained by MVAC, essentially agreed with Dr. Davey.⁴ He concluded that Mr. Henriques should avoid physically demanding work, but could pursue other types of employment:

There are a myriad of jobs that he is physically capable of performing, which would fit into this category. Unfortunately, however, all would require some type of upgrading of vocational skills in order to allow him to pursue this type of activity.

Mr. Henriques did not request or pursue any vocational training. At the time he saw Dr. Urovitz, he was living in Portugal and planning to open his own advertising business, work that apparently did not exceed his physical restrictions. Dr. Urovitz suggested, however, that if the business failed and Mr. Henriques returned to Canada, he should be assessed to determine his aptitude for other types of work.

On appeal, Mr. Henriques relied on Dr. Urovitz' comments about the need for upgrading. In my view, however, Dr. Urovitz simply recognized that Mr. Henriques faced some vocational barriers that would need to be considered. MVAC continued to pay weekly income benefits for another year. The question is whether the required training was so substantial that weekly income benefits should have been paid beyond that point.

In reaching his decision about Mr. Henriques' ongoing entitlement, the arbitrator properly considered his activities in Portugal. An insured person cannot decide to forego reasonable training and then rely indefinitely on the need for training to support his or her ongoing entitlement. As pointed out by the arbitrator, there is some similarity between Mr. Henriques' situation and that raised in my decision in Wilson v. Jevco Insurance Company, (January 13, 1995, OIC A-008409). In each case, the insured person made choices that limited his willingness to pursue suitable employment options.

Mr. Henriques did not open his own business. This was because he changed his mind about his business partner, not because he could not do the work. By November 1993, Mr. Henriques and his father had built an addition to the family home for him and his fiancée, and he was helping in his father's gas distribution business, working primarily as a driver. According to the arbitrator, Mr. Henriques testified that he was not interested in further education and planned to remain in Portugal unless some opportunity was identified in Canada involving an outdoor job that paid well.

The arbitrator found no evidence that Mr. Henriques could not have worked full-time doing the kind of light delivery work he was doing for his father if it had been available. In my opinion, this finding alone was sufficient to support the arbitrator's conclusion. However, he went on to consider the conflicting evidence of two experts, Dr. Lacroix, a psychologist who assessed Mr. Henriques at the request of MVAC, and Kent Bowman, a rehabilitation consultant who did not interview Mr. Henriques, but provided an opinion based about his employability based on the available documents.

Mr. Henriques contends that the arbitrator misconstrued Dr. Lacroix's opinion and ignored aspects of Mr. Bowman's evidence. Despite detailed submissions on this point, I am not persuaded of any error. In my view, the decision reflects a reasonable consideration of the evidence. The arbitrator preferred the evidence of Dr. Lacroix that although Mr. Henriques would face employment obstacles in Canada, there were suitable options requiring little or no retraining. He was entitled to do so and I find no reason to interfere.

Mr. Henriques submits that the jobs considered by the arbitrator are not suitable for various reasons. I will now deal with those arguments.

(i) Work history

At page 17 of his decision, the arbitrator refers to Mr. Henriques as "a young man who has worked for less than three years." Mr. Henriques claims this is a clear factual error. In support of this submission, he relies on the history contained in the report of Dr. J. Michael Lacroix,⁵ arguing that it shows he worked for at least four years.

I have a number of problems with this argument. First, I am not persuaded that the difference between three and four years, or even longer, is of any consequence. The point is that at the time of his accident, Mr. Henriques was a young man with a limited work history. I agree with the arbitrator that this is relevant to the range of jobs that can be reasonably considered. Because Mr. Henriques had not developed specialized job skills through education, training or experience, it was appropriate to consider a broad range of alternative work.

My second problem with Mr. Henriques' submission is that the history in Dr. Lacroix's report is inconsistent. While it suggests that Mr. Henriques worked for up to five and a half years, it also says that he started working when he was 15 years old. The accident happened when Mr. Henriques was still 18, so he could not have worked that long even if he had worked continuously, which he did not.

Third, Dr. Lacroix presumably relied on Mr. Henriques in compiling this history. It is not clear, therefore, that he was in a better position than the arbitrator to make findings about Mr. Henriques' work history. The arbitrator heard testimony from Mr. Henriques at the hearing, both through examination-in-chief and cross-examination. Without a transcript, it would be inappropriate to give preference to the report of Dr. Lacroix.

(ii) Remuneration

Mr. Henriques argues that the arbitrator erred in considering jobs paying far less than he was earning at the time of his accident. In his submission, the Schedule protects income at the level of average gross weekly income in the four or 54 weeks before the accident, whichever is greater, whether or not it accurately reflects typical or expected income. In his case, he earned roughly $1,000 per week in the four weeks before the accident. It follows, he argues, that he should not be expected to pursue work paying less.

I do not agree with this view of the Schedule. Section 12(4) of the Schedule deals with the calculation of weekly income benefits, not entitlement. Post-156 week entitlement is based on the person's ability to engage in "any occupation or employment for which he or she is reasonably suited by education, training or experience." As I said in Gagnon and Jevco Insurance Company, (June 9, 1997, OIC P96-00052), this test should be applied with a sense of reality. Suitable employment will depend on the person's particular circumstances. While remuneration is an important factor, the suitability of alternative work is not strictly governed by what the person happened to earn in the four weeks before the accident.

(iii) Education, training or experience

Mr. Henriques submits that the arbitrator erred in considering light work because his only experience is with physically demanding jobs. In particular, he objects to the following paragraph from page 17 of the arbitration decision:

The fact that Mr. Henriques has no training or experience in unskilled light jobs does not make the jobs unsuitable for that reason alone. In my view, it is unreasonable for a young person who has worked for less than three years at unskilled physically demanding work to argue that unskilled light work is unsuitable because he has no training or experience in unskilled light work. Further, Mr. Henriques provided no evidence that the jobs proposed by the Insurer were unsuitable because he had no experience in those jobs.

As indicated above, I agree with the arbitrator's analysis. At the time of his accident, Mr. Henriques had a relatively short work history in various unskilled jobs. It would be unreasonable to treat unskilled light work as unsuitable simply because his previous work was unskilled, but physically demanding. The arbitrator properly took a broader approach, considering what types of work someone with Mr. Henriques' background could reasonably be expected to pursue.

(iv) Job market

Mr. Henriques submits that the arbitrator erred in failing to give any consideration to the availability of alternative work, or the likelihood that he could realistically compete for those jobs even if they were available.

Entitlement under section 12(5)(b) is not based on the availability of work. If an insured person is capable of doing suitable work, he or she is not entitled to weekly income benefits. However, the job market cannot be ignored entirely. Suitable jobs must exist in the marketplace, whether currently available or not, and must be reasonably available to someone like the insured person. At page 15 of his decision, the arbitrator refers to arbitration decisions taking this approach.

Mr. Henriques submits that although the arbitrator referred to the appropriate test, he did not apply it. I find, however, that the arbitrator heard conflicting opinions on what type of work was suitable for Mr. Henriques. He preferred the evidence of Dr. Lacroix, as he was entitled to do. In my view, the decision provides sufficient reasons for his preference. I also agree with MVAC that the arbitrator was appropriately influenced by the fact that Mr. Henriques was actively involved in appropriate work, making deliveries for his father's business.

In support of his argument, Mr. Henriques also referred to the following sentence from page 19 of the decision:

Although I have followed authority that the number of actual job openings in suitable employment is not the focus of the determination of entitlement to weekly income benefits, it may be relevant to whether Mr. Henriques is entitled to retraining for employment.

I see no error. In my view, the arbitrator was attempting to give Mr. Henriques some appropriate guidance. The tests for weekly income benefits and other benefits are somewhat different. While Mr. Henriques was no longer entitled to weekly income benefits because he was capable of engaging in suitable work, he still might reasonably require services to enhance his employability in a particular field.

IV. EXPENSES

While unsuccessful appellants are sometimes granted appeal expenses, it is not a routine order. The appeal must raise some important issue or involve some other compelling reason that expenses should be awarded. Although this appeal raised a number of issues, it had little merit at its core. I conclude, therefore, that appeal expenses are not appropriate.

August 21, 1997

David R. Draper Director's Delegate

Date

Footnotes

Eg. McLennon and Pilot Insurance Company, (August 15, 1997, OIC A96-001499); Grewal and State Farm Mutual Automobile Insurance Company, (May 13, 1997, OIC A-004598); Pinto and General Accident Assurance Co. of Canada, (April 10, 1997, OIC A96-001248); and Worthman and AXA Insurance (Canada), (January 30, 1997, OIC A96-000486).
Arbitration exhibits I1 and I2.
Arbitration exhibit A2.
Arbitration exhibit I3.
Arbitration exhibit I1.