Neutral Citation: 1997 ONICDRG 169

OIC A95-000318

ONTARIO INSURANCE COMMISSION

BETWEEN:

PETER PAVLJUK

Applicant

and

CANADIAN GENERAL INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Peter Pavljuk, was injured in a motor vehicle accident on September 20, 1990. He applied for and received statutory accident benefits from Canadian General Insurance Company, payable under the Schedule.¹ Canadian General terminated weekly income benefits of $600 on September 20, 1993. Mr. Pavljuk seeks reinstatement of these benefits. Canadian General seeks repayment of part of the benefits it paid because Mr. Pavljuk applied for and received Canada Pension Plan payments, which Canadian General alleges should have been deducted from his gross weekly income in calculating the benefit. The parties were unable to resolve their disputes through mediation, and Mr. Pavljuk applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Mr. Pavljuk entitled to a weekly income benefit from September 21, 1993, onward, pursuant to section 12(5) of the Schedule?

2. Are the CPP benefits that Mr. Pavljuk receives deductible from his gross weekly income, pursuant to subparagraph 12(4)(b)(i) of the Schedule?

3. If the answer to question 2 is yes, is Canadian General entitled to a repayment pursuant to subsection 27(3) of the Schedule?

4. Is Canadian General liable to pay a special award?

Mr. Pavljuk also claims interest on any amounts owing and his expenses incurred in the arbitration proceeding.

Result:

1. Mr. Pavljuk is not entitled to further benefits.

2. The CPP benefits are not deductible from Mr. Pavljuk's gross weekly income.

3. Canadian General is not entitled to a repayment.

4. Canadian General is not liable to pay a special award.

5. Mr. Pavljuk is entitled to his expenses incurred in respect of the arbitration.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on February 3, 4, 5, and April 10, 1997, before me, David Evans, Arbitrator.

Those who attended the hearing, the witnesses, and the exhibits are set out in the Appendix.

Evidence and Findings:

Mr. Pavljuk was born in Yugoslavia in 1939, left school after grade 4, studied carpentry, arrived in Canada in 1961, and in 1964 joined Centrac Industries as a carpenter installing fixtures and commercial furniture. From approximately 1980 he was the foreman of the chair department at Centrac Industries: he drove the company truck to installation sites and supervised up to 20 workers while performing the more delicate work himself. He earned approximately $42,000 in 1989.

The accident occurred on September 20, 1990. Mr. Pavljuk testified that he never attempted a return to work at Centrac Industries and that he is incapable of working. Centrac subsequently went bankrupt. Canadian General, relying on paragraph 12(5)(b) of the Schedule, discontinued Mr. Pavljuk's weekly income replacement benefits after 156 weeks on the basis that his injuries do not continuously prevent him from engaging in any occupation or employment for which he is reasonably suited by education, training or experience.

In considering any particular occupation, paragraph 12(5)(b) poses a two-part test: is the job suitable for the insured, and if so, is the insured continuously prevented from doing it?

The first question is whether Canadian General has proposed a suitable replacement occupation. In May 1993 Canadian General commissioned Vocational Pathways Inc. to conduct a functional abilities evaluation of Mr.Pavljuk. Vocational Pathways included in its evaluation a vocational assessment that Mr. Pavljuk could perform the occupation of a "non-working cabinetmakers foreman," whose duties include supervising and co-ordinating the activities of workers engaged in the assembly and repair of wooden products such as home furniture, picture frames, office equipment, doors, door and window frames, and store fixtures. This position pays $35-40,000 per year and makes only light physical demands. Mr. Pavljuk offered no evidence to suggest that this occupation was unsuitable for him aside from his alleged physical inability to perform it. The occupation offers a salary range similar to what Mr. Pavljuk had been earning and comprises a supervisory role similar to that which he had performed for 10 years. I find that this would be a suitable occupation in light of Mr. Pavljuk's education, training, and experience.

The second question is whether Mr. Pavljuk's injuries continuously prevent him from engaging in that occupation.

Mr. Pavljuk testified that during the accident on September 20, 1990, his chest hit the steering wheel. He did not suffer any loss of consciousness and went home. The next day, he went to the North York Branson Hospital where his breathing problems and chest pains led to his admission until October 3, 1990, when he was released to the care of his family physician, Dr. Aleksic. Dr. Aleksic referred him to Dr. Mikazans for chiropractic treatment. (Mr. Pavljuk was not able to produce either the clinical notes and records of Dr. Aleksic, who died in 1994, or those of Dr. Mikazans, who has moved.)

Dr. Ernest White of Riverfront Medical Services reported to Canadian General in March 1991 that Mr. Pavljuk's main complaints were to his right shoulder and upper arm, with restricted movement of the shoulder, as well as some discomfort in the neck and lower back and some dizziness. Dr. White concluded that his main problem was an adhesive capsulitis in the right shoulder. Dr. White found Mr. Pavljuk had very good movement of the lumbar spine with only 20 percent restriction, normal spinal rhythm, and no involuntary muscle spasm. These findings are of particular interest because Mr. Pavljuk's present complaints are largely of lower back pain accompanied by very restricted lumbar movement.

Mr. Pavljuk testified that he has problems in his lower back in essentially the same area where he suffered injuries in a 1976 automobile accident. Following that accident, Dr. Ezra Silverstein performed surgery — a laminectomy and discotomy — at the L4-L5 level in the lumbar spine, which allowed Mr. Pavljuk to return to work after six months.

Following the 1990 accident, Dr. Silverstein saw Mr. Pavljuk again in November 1991, and he and Dr. Peter Parker admitted Mr. Pavljuk to hospital for investigation from November 28 to December 19, 1991. Dr. Silverstein writes in his report of January 31, 1992, that Mr. Pavljuk told him that he developed disabling low back pain "at once" after the accident. Mr. Pavljuk also told him that walking caused pain to radiate from his back into his buttock, thigh, and calf, particularly on the left side. Dr. Silverstein did not recommend surgery and concluded that the accident inflicted a back sprain on a vulnerable spine, disabling Mr. Pavljuk from returning to work as a carpenter.

Over the following months, Dr. Peter Parker, a physiatrist, treated Mr. Pavljuk and consulted with the rehabilitation specialists retained by Canadian General. Dr. Parker continually encouraged Mr. Pavljuk to lose weight and increase his activity level, without success. He noted significant self-limited range of motion in the spine. Dr. Parker eventually concluded that Mr. Pavljuk could return to work at sedentary to light levels at the occupations set out by Vocational Pathways in the May 1993 assessment. However, Dr. Parker assessed the likelihood of Mr. Pavljuk returning to work as poor in light of Mr. Pavljuk's perception of his disability and poor motivation to increase his activity level. He also felt that other problems unrelated to the accident — such as Mr. Pavljuk's high blood pressure — also affected his recovery.

After Canadian General terminated Mr. Pavljuk's weekly benefits, Dr. Aleksic referred Mr. Pavljuk to Dr. Vlasta Hajek, a physiatrist. In her reports and testimony, Dr. Hajek noted that Mr. Pavljuk had been pain-free after his 1976 surgery until the 1990 accident. She found that Mr. Pavljuk has permanent restrictions in prolonged standing, sitting, lifting, and working overhead, and in frequent bending. Furthermore, his language and concentration problems, combined with his physical problems, made the foreman occupation inappropriate. (Mr. Pavljuk also has some congenital problems in his right arm; the Vocational Pathways assessment concluded that his limitations in reaching overhead appeared to be related to that congenital difficulty.)

Mr. Pavljuk also relies on several reports from Dr. Charendoff, who provided chiropractic treatments after Dr. Mikazans moved.

Dr. Aleksic's reports indicate that he relied primarily upon the assessments of Dr. Hajek and Dr. Charendoff to conclude that Mr. Pavljuk could not return to work. Similarly, Dr. Kaminski, who became Mr. Pavljuk's family physician in July 1994 after Dr. Aleksic died, testified that he also relied upon those specialists to conclude that Mr. Pavljuk could not return to work.

I find Dr. Charendoff's comments in his reports to be generic and of no particular help in assessing the question at hand. As for Dr. Hajek, I find several of her premises and conclusions open to question.

Dr. Hajek testified that Mr. Pavljuk had been "pain-free" after the 1976 surgery until the 1990 accident. However, Dr. Silverstein wrote that Mr. Pavljuk did experience intermittent back pain, with some aching in the leg post-surgery, but never enough to require treatment; Mr. Pavljuk testified to the same effect. Furthermore, the OHIP summary shows that Mr. Pavljuk saw the chiropractor Dr. Mikazans in January 1990 and that in April 1990 he saw Dr. Aleksic for assessment of lumbago and disc disorders. The records of Dr. Silverstein also include records of Mr. Pavljuk's office visits to a Dr. Silvina Decena showing a visit for right shoulder pain in 1988. I find that Mr. Pavljuk was not pain-free before the 1990 accident and that he had sought prior treatment for some problems he now blames on that accident.

Dr. Hajek concluded that Mr. Pavljuk's language difficulties made him uncompetitive. However, Mr. Pavljuk was able to work in English as a foreman for 10 years, to communicate effectively in spoken English during the Vocational Pathways assessment, and to testify without the help of the translator at the hearing. I find that no language barrier substantially interferes with Mr. Pavljuk's competitiveness.

Dr. Hajek testified that Mr. Pavljuk's concentration problems make him uncompetitive. Although she agreed that Mr. Pavljuk had no history of head injury, she asked me to "consider the forces of the collision." However, Mr. Pavljuk testified that he does not have psychiatric or concentration problems. The Clarke Institute assessed Mr. Pavljuk in October 1992 and found he had no significant problems in memory tests. I find that no concentration problems substantially prevent Mr. Pavljuk from working.

Dr. Hajek testified that Mr. Pavljuk could not physically perform the job of foreman. I find two difficulties with her conclusion. First, she could give no evidence about the physical demands of Mr. Pavljuk's original occupation, let alone the proposed one; she believed that she and Mr. Pavljuk had discussed his work, but she could give no details other than to assume what physical demands are usually asked of a cabinetmaker. Second, her conclusions were based only upon her observations of Mr. Pavljuk in her office.

Mr. Pavljuk was videotaped on several occasions performing movements and actions inconsistent with those observed by the physicians. For instance, Dr. Kaminski testified that on examination Mr. Pavljuk grimaced and grunted frequently as he made slow and stiff movements. Dr. Kaminski did not expect Mr. Pavljuk to be able to carry a carton of soft drinks, to bend into the trunk of a car for more than five or six minutes, or to move his arms above shoulder height. Mr. Pavljuk engaged in these activities on the surveillance videotapes. Dr. Parker testified that, compared to what he saw in his office, Mr. Pavljuk moved faster, more fluidly, with greater ease, and with a significantly greater ability to bend forward and to the side. Finally, although Dr. Hajek testified that Mr. Pavljuk demonstrated some accommodation on the tapes in that he bent more through the hips than through the back, she agreed that he was able to carry a soft drink carton normally, that he entered the vehicle in a fluid motion that would be difficult to perform with back pain, and that he did not appear to be in distress.

Because of these problems with Dr. Hajek's premises and conclusions, I do not find her evidence persuasive on the issue of whether Mr. Pavljuk is continuously disabled from working at a suitable occupation.

Mr. Pavljuk also filed a report dated January 24, 1997, of Dr. Marciniak of the Sports Medicine and Rehabilitation Clinics in support of his position that he is incapable of working. Again, the conclusions of Dr. Marciniak are partly based on his observations of Mr. Pavljuk's limited range of motion: Dr. Parker testified that Mr. Pavljuk's range of motion on the tapes is greater than what Dr. Marciniak observed. Furthermore, the report addresses more the issue of whether Mr. Pavljuk could return to his former occupation than whether he could work at a suitable alternative occupation.

On balance, I prefer Dr. Parker's assessment of Mr. Pavljuk because he treated Mr. Pavljuk until April 1994, saw Mr. Pavljuk 12 times, and made numerous efforts to motivate him to increase his activity level. I find that Mr. Pavljuk is not continuously prevented from engaging in any occupation or employment for which he is reasonably suited by education, training or experience. Therefore, Mr. Pavljuk is not entitled to further benefits.

As I have found that Mr. Pavljuk is not entitled to further benefits, Canadian General accordingly is not liable to pay a special award.

CPP Benefits:

Mr. Pavljuk applied for and was granted a Canada Pension Plan ("CPP") benefit. If this benefit is a "payment for loss of income," it is deductible from Mr. Pavljuk's gross weekly income in the calculation of his weekly benefit. Counsel for Canadian General calculated that, if the CPP benefit is deductible, then Mr. Pavljuk was overpaid $17,516.16.

Counsel for Mr. Pavljuk relied on the Divisional Court decision in Cugliari v. White et al,²which held that the CPP benefit is not deductible in the tort context. Counsel for Canadian General conceded that no OIC appeal decision had considered the issue where the parties disputed the deductibility. However, he argued that if the CPP benefit was intended to be excluded in the Schedule it would have been so stipulated. He submitted that the benefit is in the nature of a payment for loss of income.

Since the conclusion of the hearing, Arbitrator Blackman has rendered the decision Goos and Non-Marine Underwriters, Members of Lloyd's,³, in which he considers Cugliari and relevant OIC decisions. He found these OIC decisions not helpful, as the issue was either conceded or it was assumed that the deductibility of the benefit was well established. However, as the court in Cugliari did not agree with lower court decisions that had considered the benefit deductible, it follows that the deductibility of the benefit is not well established. Furthermore, in Cugliari the court held that the CPP benefit is a non-indemnity payment: that is, a payment paid upon proof of a specified event such as disability regardless of any pecuniary loss. Arbitrator Blackman agreed. Finally, Arbitrator Blackman concluded that the words "payments for loss of income" in the context of the Schedule do not refer to non-indemnity payments such as the CPP benefits. Therefore, CPP benefits are not payments for loss of income and are not deductible from gross weekly income in the calculation of the benefit. I can find no reason to disagree with his conclusion. Accordingly, I find that the CPP benefits received by Mr. Pavljuk are not deductible from his gross weekly income and that Mr. Pavljuk was not overpaid.

Expenses:

Mr. Pavljuk is entitled to his reasonable expenses incurred in respect of this arbitration proceeding.

Order:

1. Mr. Pavljuk is not entitled to further benefits.

2. The CPP benefits are not deductible from Mr. Pavljuk's gross weekly income.

3. Canadian General is not entitled to a repayment.

4. Canadian General is not liable to pay a special award.

5. Mr. Pavljuk is entitled to his expenses incurred in respect of the arbitration.

September 12, 1997

David Evans

Arbitrator

Date

APPENDIX

Present at the Hearing:

Applicant:

Peter Pavljuk

Mr. Pavljuk's

Orest H.T. Rudzik

Representative:

Barrister and Solicitor

Canadian General's

Wayne Edwards

Representative:

Barrister and Solicitor

Court Reporters:

John Tomczak; Maria Rossi; Gabriella Micelli; Cheryl Hunt

Translator:

Olivera Bankovitch (Serbo-Croatian)

Witnesses:

Peter Pavljuk

Dr. Peter E. Parker

Dr. V. Hajek

Dr. Michael Kaminski

Exhibits:

Exhibit 1

Insurer's Document Brief

Exhibit 2

Insurer's Medical Brief Volume I

Exhibit 3

Letter dated January 24, 1997, from Sports Medicine and Rehabilitation Clinics

Exhibit 4

Letter from KPMG Inc. dated December 24, 1996

Exhibit 5

Insurer's Medical Brief Volume II

Exhibit 6

Videotape recorded October 11, 1991, by McNulty & Associates

Exhibit 7

Videotape recorded January 12, 1996, by Hughes Cobbett Daneluzzi

Exhibit 8

Videotape recorded September 1996 by Hughes Cobbett Daneluzzi

Exhibit 9

Videotape recorded January 1996 by Hughes Cobbett Daneluzzi

Exhibit 10

OHIP Summary dated April 16, 1996

Exhibit 11

Curriculum vitae of Dr. Peter Parker

Exhibit 12

Report of Dr. Martin Roscoe dated January 24, 1997

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents On or Between June 22, 1990 and December 31, 1993, Ontario Regulation 672, as amended.
2. 2(1996), 1996 CanLII 11778 (ON CTGD), 31 O.R. (3d) 42 (Ont. Div. Ct.)
3. 3(June 12, 1997), OIC A96-000393