Neutral Citation: 1997 ONICDRG 58

Appeal P96-00019

OFFICE OF THE DIRECTOR OF ARBITRATIONS

BHARAT KOTAK

Appellant

and

CAA INSURANCE COMPANY (ONTARIO)

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

Bharat Kotak (representing himself)

Guy Farrell (for CAA Insurance)

APPEAL ORDER

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 decision, dated December 20, 1995, is confirmed.
No appeal expenses are payable.

March 27, 1997

David R. Draper

Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by Bharat Kotak from an arbitration decision, dated December 20, 1995. He claims that the arbitrator erred in not awarding him weekly income benefits at a higher rate and for a longer period, and his expenses for attending the Devry Institute of Technology ("Devry"). He also submits that CAA Insurance Company (Ontario) ("CAA Insurance") should be ordered to pay a special award for unreasonably withholding or delaying his benefits.

II. BACKGROUND

Mr. Kotak was involved in an automobile accident on June 14, 1993. He applied to CAA Insurance for weekly income benefits under Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 ("the Schedule") on the basis that he was unable to return to his pre-accident work at Africana Grocers. Although this store was registered in his wife's name, Mr. Kotak essentially ran the business. The arbitrator rejected CAA's argument that this was non-physical work, finding as follows:

I am satisfied, based on the evidence of the Applicant, and his two former employees, Ms. Joana Brito and Mr. Carlos Pacheco, that Mr. Kotak was involved in both the physical and non-physical aspects of operating his business. I find that managing his store, placing orders, serving customers, stocking shelves, carrying items from the floor to shelves and cleaning his store were fundamental pieces of work performed by Mr. Kotak, and therefore constituted the essential tasks of his occupation or employment.

I further find that the physical demands of these essential tasks included lifting and carrying stock, and constant standing, bending and walking. [Decision, p.7]

CAA Insurance paid weekly income benefits at the minimum rate of $185.60 from June 21, 1993 until February 23, 1994. At that point, it stopped paying on the basis that Mr. Kotak was no longer substantially unable to perform the essential tasks of his pre-accident employment or occupation. Mr. Kotak disagreed and applied for mediation. He not only claimed ongoing entitlement to weekly income benefits, but also that he should have received $600 per week, not $185.60.

Mr. Kotak was represented by a lawyer at the mediation. In his appeal material, he claims that the mediator ordered CAA Insurance to pay him weekly income benefits until July 23, 1994 at $260.14 per week, including retroactive payments. This is a misunderstanding of the role of the mediator. The mediator has no authority to order the payment of benefits. Her role was to facilitate an agreement between the parties. Although Mr. Kotak continued to claim ongoing weekly income benefits at $600 per week, CAA Insurance agreed to pay at a slightly higher rate and for an additional five months.

Four months before the arbitration hearing started, the parties participated in a pre-hearing conference. Mr. Kotak was there, represented by a different lawyer. The outstanding issues were identified and the exchange of documents was discussed. Each party was required to provide the other with certain documents or information prior to the hearing, as set out in the pre-hearing letter.

The arbitration hearing took place over five days. Both parties were represented by lawyers. Nine witnesses were called and sixteen exhibits were filed, including a brief of medical documents. Mr. Kotak testified and called five additional witnesses in support of his claim: his wife, his father, his brother and two former employees. CAA Insurance called a physician, an accountant and a private investigator. Mr. Kotak did not rely on an interpreter, although one was present to interpret the testimony of his wife and father.

In his decision, the arbitrator did not completely accept either party's position. He concluded that Mr. Kotak was entitled to weekly income benefits until May 19, 1995, an additional 10 months. This fell short, however, of the ongoing benefits claimed by Mr. Kotak. The arbitrator also ordered that the proper amount of Mr. Kotak's benefits was $361.03, an amount higher than the insurer accepted, but less than Mr. Kotak claimed. Mr. Kotak's claim for expenses to attend Devry was rejected based on the arbitrator's finding that by May 19, 1995, he was substantially able to perform the essential tasks of his pre-accident work. Finally, the arbitrator ordered CAA Insurance to pay interest on the outstanding benefits and Mr. Kotak's arbitration expenses.

III. THE APPEAL

Mr. Kotak appealed the arbitrator's order, maintaining that he is entitled to retroactive and ongoing weekly income benefits at $600 per week, expenses to attend Devry, plus interest and his appeal expenses. He also asks that CAA Insurance be ordered to pay a special award under section 282(10) of the Insurance Act.

Just after he filed his appeal, Mr. Kotak sent a package of sixteen documents, most of which were not filed as exhibits at the arbitration hearing. Some of the documents were created before the arbitration hearing and some after. One of the medical reports was specifically rejected by the arbitrator because it was not prepared or presented until after the evidence was in and final arguments were to start.

I wrote to the parties on April 11, 1996, advising them of my appointment and explaining the appeal process. Mr. Kotak was told that the next step was for him to file written submissions, including submissions supporting the introduction of his new evidence. He asked for additional time to file his submissions because he was writing exams and had scheduled a further assessment of his condition. I granted Mr. Kotak a two-month extension, but advised him that he would need to make submissions about the admissibility of any new assessment report.

A few days later, Mr. Kotak asked for an award of interim expenses under section 282(11.1) to allow him to retain a lawyer. In a letter dated May 15, 1996, I denied this request, as follows:

The interim expenses section of the Insurance Act is not intended to guarantee paid legal representation. The person requesting interim expenses must show why they are required to allow him or her a reasonable opportunity to pursue the claim. In this case, there was a five day arbitration hearing in which Mr. Kotak was represented by a lawyer. Although he was only partially successful, the arbitrator awarded him his expenses. While I am sympathetic to Mr. Kotak's concerns about representing himself on his appeal, I am not persuaded that there is sufficient merit to the appeal to justify ordering CAA Insurance to pay his legal fees as an interim expenses under 282(11.1) of the Insurance Act.

Mr. Kotak prepared his own written submissions. They obviously represent a substantial effort, running over 50 pages. They include a mixture of submissions and unsworn evidence, a common problem for unrepresented appellants. With his written submissions, Mr. Kotak also attached another substantial set of documents. Some of these documents were arbitration exhibits and some were filed previously in the appeal, but a number of them were entirely new to the proceedings. In its written submissions, CAA Insurance again objected to the introduction of any new evidence.

In a letter dated October 9, 1996, I advised the parties that a date would be scheduled for oral submissions, including submissions on whether any or all of Mr. Kotak's new evidence should be considered in the appeal.

Mr. Kotak came to the appeal hearing with a written version of his oral submissions. It too is over 50 pages long and like his previous submissions, is a mixture of submissions and evidence. Attached to these submissions are yet more documents.

The appeal hearing was difficult for everyone involved. Despite objections from CAA Insurance, I reserved my decision on the admissibility of the new documents and placed few restrictions on the scope of Mr. Kotak's submissions. One practical problem during the hearing was that the volume of documents and the fact that they were submitted at different times and in different packages made it difficult to find the relevant material. More importantly, however, Mr. Kotak did not seem to understand the limited nature of an appeal. Although he argued that the arbitrator erred in a number of respects, he treated the appeal as part of an ongoing investigation into his condition, to the point of asking me to phone one of his current doctors.

The appeal hearing did not take place until nineteen months after the arbitration hearing. Mr. Kotak wants me to accept his evidence about what happened during that period in support of his claim that the arbitrator's decision was wrong. Counsel for CAA Insurance was understandably concerned about his ability to respond to this new information. However, I wanted to give Mr. Kotak every opportunity to show that the arbitration hearing did not adequately deal with his entitlement to benefits.

IV. ANALYSIS AND CONCLUSIONS

It is well established that my role on appeal is not to second-guess the arbitrator's assessment of the evidence. He had the advantage of hearing the witnesses and could evaluate the other evidence in light of it. The arbitration hearing was not recorded and, therefore, no transcript is available. Because the arbitrator was in a better position to assess the evidence, his decision should not be disturbed unless it is shown that he made an error resulting in an injustice, or there was no evidence capable of supporting his findings.

I was impressed with the sincerity of Mr. Kotak's submissions and the effort that he put into them. Even considering all the new evidence, however, I am not persuaded that the arbitrator's decision should be disturbed. My reasons follow.

A. Period of Eligibility

The additional medical evidence filed in the appeal does not fundamentally change the situation faced by the arbitrator. While some of the later medical evidence supports Mr. Kotak's position that he is unable to return to his pre-accident work at the store and should retrain at Devry, the earlier evidence overwhelmingly does not.

On June 15, 1993, the day after his accident, Mr. Kotak saw Dr. A. S. Vozoris, complaining of headaches, dizziness, neck and shoulder stiffness and back pain. X-rays were done, but no significant problems were found. Dr. Vozoris treated Mr. Kotak on the basis that he had suffered a flexion-extension type injury. He referred Mr. Kotak for physiotherapy and gave him injections of "very small doses of depo-medrol" at three trigger points.

Mr. Kotak continued with his physiotherapy treatments, but his visits with Dr. Vozoris were interrupted. Initially, this was because Dr. Vozoris was away on summer holidays. However, when he returned in early September 1993, Dr. Vozoris was unable to contact Mr. Kotak. When they finally met on November 2, 1993, they disagreed about treatment. Mr. Kotak wanted to continue with physiotherapy, but Dr. Vozoris felt that ongoing passive physiotherapy would be of little value.

Dr. Vozoris saw Mr. Kotak again on November 27, 1993, their last meeting. His physical findings were as follows:

On physical examination there was no stiffness of the posterior cervical muscles. Movements were free and painless. There was no neurological signs affecting his balance mechanism and coordination. Slight tenderness was present at the sub-occipital region, although I have doubts about this finding because it had not been present before. Slight tenderness was present also at the origins of supraspinati and trapezei muscles.¹

By this time, Mr. Kotak had referred himself to Columbia Health Care and its Medical Director, Dr. David Goldstein. Although Dr. Vozoris expressed "grave doubts" that Mr. Kotak would respond to the physiotherapy and exercise program at Columbia Health Care, he recommended giving Mr. Kotak the benefit of the doubt and allowing him to complete the 12-week program, at which point he could return to work managing the store. Dr. Vozoris felt that this would give Mr. Kotak more time than usually necessary to recover from this type of flexion-extension injury.

CAA Insurance accepted Dr. Vozoris' opinion and continued to pay Mr. Kotak weekly income benefits for an additional twelve weeks. It also paid for Mr. Kotak's treatment at Columbia Health Care.

Interestingly, Columbia Health Care's initial report raises some causation questions. The Director of Physiotherapy found that many of Mr. Kotak's problems were due to "scar tissue build-up and disuse atrophy." She found it difficult to determine the extent to which his physical problems were accident-related. Mr. Kotak was also seen by a Psychosocial Therapist at Columbia Health Centre, who found him extremely upset about his situation, including his financial problems and his relationship with his wife.

After Mr. Kotak's weekly income benefits were initially cancelled, effective February 24, 1994, Dr. Goldstein wrote to CAA Insurance, expressing the following opinion:

On physical examination, Mr. Kotak had evidence of tenderness and spasm primarily in the shoulder girdle and low back musculature. There was no evidence of any neurological dysfunction. I felt that his injuries were soft tissue in nature and that he was also having difficulty coping from a psychological perspective. I suggested that a progressive exercise regimen be integrated into a rehabilitation program which would include some psychosocial support with our behavioural therapist.

Mr. Kotak has attended our centre on an average of three time per week since that time. Although his progress has been slow, he has experienced substantial improvements in his emotional outlook. However, at present, he is continuing to deal with a number of external stressors which are interfering with his ability to progress further. I would therefore request that his accident benefits be reinstated for the next three months to provide some sense of stability for this gentleman and hopefully facilitate his recovery process.² [emphasis added]

This is not a very strong report. It gives little reason why Mr. Kotak could not return to work at his store other than some "external stressors." It is also difficult to understand why he could not resume some role at the store. Although the arbitrator found that his pre-accident duties included some physical tasks, other aspects were not physically demanding.

In his appeal submissions, Mr. Kotak objected to the arbitrator's reference to the decision in Simpson and Royal Insurance Company, (April 6, 1994, OIC A-003864). The arbitrator was not suggesting, however, that Mr. Kotak's situation was comparable to Mr. Simpson's. He relied on the Simpson decision for the proposition that Mr. Kotak's ability to adjust his work tasks should be considered. This was quite appropriate. The fact that Mr. Kotak's 67 year old father was able to run a larger store with only one full-time assistant certainly suggests that adjustments were possible.

Dr. Goldstein referred Mr. Kotak to The Accident Management Group for a vocational assessment to guide his return to work. At this time, in the Spring of 1994, there still was no suggestion Mr. Kotak had suffered any long-term injuries in the accident that would prevent him from returning to work as a store keeper.

By July 1994, Mr. Kotak had not returned to work and the mediation process was underway. CAA Insurance asked Dr. Goldstein to prepare a follow-up report. In evaluating this report, it is significant that Dr. Goldstein was the doctor selected by Mr. Kotak after he decided to stop seeing Dr. Vozoris. As of July 4, 1994, Dr. Goldstein reported that Mr. Kotak's emotional condition had "improved considerably." He also reported that Mr. Kotak had stopped meeting with the behavioural therapist four or five weeks previously and had not attended for physical therapy for the past month. Based on this information, Dr. Goldstein felt that Mr. Kotak could be discharged from treatment.

With respect to returning to work, Dr. Goldstein stated:

Although Mr. Kotak continues to experience some lower back discomfort, I believe that Mr. Kotak is presently ready to assume many but not all of his previous occupational duties. In the past, I suspect that when he felt better, Mr. Kotak did try to do more around the store and this only exacerbated his problem. I therefore like to suggest [sic] that a counsellor be involved with re-introducing him to the work place to ensure that he limits his activities to non-physical ones and learns how to delegate more demanding tasks to other staff.³ [emphasis added]

The arbitrator found that Mr. Kotak's efforts were less than assumed by Dr. Goldstein. Mr. Kotak's witnesses testified that although he sometimes came into the store, he did not do any work. The importance of Dr. Goldstein's follow-up report is that, once again, there is no suggestion that it would be inappropriate for Mr. Kotak to return to his pre-accident work.

Mr. Kotak did not return to Columbia Health Care or Dr. Goldstein. Instead, he went to another general practitioner, Dr. Elizabeth Harrison, who then referred him to Dr. Charles Godfrey, an orthopaedic surgeon. In his initial report, dated August 16, 1994, Dr. Godfrey states that he found muscle tightness and several tender spots. He felt that Mr. Kotak needed exercise and referred him to the Toronto Rehabilitation Centre.

A major limitation of Dr. Godfrey's report is that it is not clear how much information he was given about Mr. Kotak's treatment history. Approximately two months earlier, Mr. Kotak had stopped attending an exercise program at Columbia Health Centre and the Medical Director, Dr. Goldstein, felt he could be discharged.

CAA Insurance asked an occupational therapist, Ms. Susan Track, to evaluate Mr. Kotak's needs. In her report, dated August 26, 1994, Ms. Track suggested that Mr. Kotak increase his activities, but did not support his attendance at Toronto Rehabilitation Centre given his previous attendance at Columbia Health Centre.

At the mediation, CAA agreed to pay Mr. Kotak weekly income benefits for an additional three months, covering the period from February 24, 1994 to July 26, 1994. This essentially covered the period recommended by Dr. Goldstein. Given the medical evidence available, I find no reason to criticize the decision not to pay weekly income benefits beyond July 26, 1994.

On October 13, 1994, The Accident Management Group reported that Mr. Kotak did not want to return to work at his store and had investigated the possibility of retraining to work in electronics repair or as a computer technician. He expressed interest in attending an eight-semester program at Devry, but first wanted to complete the exercise program at Toronto Rehabilitation Centre.

By this time, Mr. Kotak had not worked for 16 months and seemed convinced that he could not handle his pre-accident work at the store. The rehabilitation specialists, supported by Dr. Godfrey, accepted his need for further treatment and retraining. In start contrast are the opinions of Ms. Track and Dr. Ameis, a physiatrist. They found no indication that Mr. Kotak suffered any serious injuries in the accident and concluded that his biggest problem was his own belief that he is disabled. Dr. Ameis concluded as follows:

Certainly one finds nothing on examination at the present time to justify this patient's claims that he is physically unwell, in pain, and disabled. There are no active diseases, disturbances of physiology or anatomy, or impairments of function. This patient could be doing all the housework, all the work he was doing in the stores, or any other form of physical activity that he might choose.

I regard it as inappropriate for vocational rehabilitation to be contemplated in the direction of sending this man back to school for 2 to 3 years. This would delay his return to productive activity and would reward him for inappropriate complaints and behaviours.

By an act of will, he can make himself better, but he will not do so as long as there is a strong incentive for him to remain an invalid accident victim in his own perceptions.⁴

Despite Dr. Ameis' strong opinion that Mr. Kotak was not physically limited, he suggested that Mr. Kotak be allowed to the "logical cycle" of a full six weeks of physical reconditioning at Toronto Rehabilitation Centre. Mr. Kotak continued at Toronto Rehabilitation Centre, funded by CAA Insurance, for well over six weeks, completing the back program on May 19, 1995.

In his appeal submissions, Mr. Kotak stated that Toronto Rehabilitation Centre had to discharge him because CAA Insurance refused further funding. I find no basis for this submission. CAA Insurance not only funded Mr. Kotak through the back program, but then funded a prevocational evaluation program at Toronto Rehabilitation Centre starting on May 30, 1995, as recommended by Toronto Rehabilitation Centre and The Accident Management Group.

Before the pre-vocational assessment was completed, Mr. Kotak started at Devry. It appears that as a result, the focus of the assessment shifted to his ability to attend school. The recommendation was for him to continue at Devry, continue to exercise in a community pool and eventually start to work part-time.

Mr. Kotak submitted that by paying for the pre-vocational assessment, CAA Insurance acknowledged that he needed retraining. I draw no such inference. CAA Insurance relied on the opinions of Ms. Track and Dr. Ameis. To its credit, however, CAA Insurance agreed to fund some further investigations rather than cut him off entirely.

In my opinion, there was substantial evidence before the arbitration that by July 26, 1994, when weekly income benefits were terminated, Mr. Kotak was no longer "substantially unable to perform the essential tasks" of his pre-accident work. However, the arbitrator ordered CAA Insurance to pay him benefits for nearly 10 more months. In doing so, it appears that he relied on the opinion of Dr. Ameis that although Mr. Kotak was capable of returning to work, he should be allowed to complete the Toronto Rehabilitation Centre program. The arbitrator was entitled to rely on Dr. Ameis' opinion and I find no reason to interfere with his decision. In fact, I agree with CAA Insurance that this was a generous decision, giving Mr. Kotak a second chance to complete a rehabilitation program before he returned to work.

Mr. Kotak claims that the most recent medical evidence vindicates his position. He submits that the doctors have finally found the reasons for his ongoing health problems. He points to findings that he has diabetes mellitus and may have ischemic heart disease.⁵ He also refers to a CT scan report showing "minimal central spinal stenosis seen at L4-5 secondary to a mild disc bulge and overgrowth of the facets and ligamenta flavum."⁶

The difficulty is that these new findings raise as many questions as they answer. It is not obvious that diabetes, heart disease and spinal stenosis are accident-related problems. Mr. Kotak makes a rather dramatic connection between his diabetes and the injections he received from Dr. Vozoris. However, he provided no medical opinion to support this, relying on an incomplete extract from the Compendium of Pharmaceuticals listing "manifestations of latent diabetes mellitus" as an adverse effect of depo-medrol.

Even if I treat Mr. Kotak's appeal as an application to reconsider the arbitration decision based on this new medical information, I am not persuaded that there is a sufficient basis for reopening the inquiry. Mr. Kotak would need some clear medical evidence that his newly diagnosed problems were caused by the accident, at least indirectly, and that they explain his inability to return to his pre-accident work.

For these reasons, Mr. Kotak's appeal of the duration of his weekly income benefits is dismissed.

B. Expenses to Attend Devry

Mr. Kotak's need for retraining depends on his inability to return to his pre-accident work. Because I have upheld the arbitrator's conclusion that by May 19, 1995, Mr. Kotak was able to perform the essential tasks of running a store, I am not prepared to interfere with the denial of his expenses to attend Devry.

C. Amount of Weekly Income Benefits

The onus was on Mr. Kotak to establish his entitlement to the level of benefits he claimed. This requires reliable and credible evidence of both his pre and post-accident income. As someone running a small business, Mr. Kotak would not be expected to produce sophisticated records, but he must provide some reasonable basis upon which his benefits can be calculated.

The arbitrator found Mr. Kotak's evidence about his financial situation incomplete and unreliable. After hearing testimony from both Mr. Kotak and the accountant retained by CAA insurance, he found "the Insurer's reports to be far more reliable and consistent than Mr. Kotak's statements."⁷ I find no reason to second-guess the arbitrator's assessment of this evidence.

As noted above, Mr. Kotak did not challenge the amount of his benefits until CAA Insurance stopped paying them and he applied for mediation. CAA Insurance did not simply take the position that Mr. Kotak had failed to prove his entitlement above the minimum. Instead, it retained the accounting firm of Coopers & Lybrand to assess the proper amount. In my view, this was an appropriate response to Mr. Kotak's claim for benefits at a higher rate.

Based on the first Coopers & Lybrand report, CAA Insurance agreed to increase Mr. Kotak's weekly income benefits from $185.60 to $260.14 per week. Before the arbitration hearing, CAA Insurance asked Coopers & Lybrand to prepare a more thorough report. In its second report, Coopers & Lybrand corrected some calculation errors in a manner favourable to Mr. Kotak.

Mr. Kotak submitted that the errors made by Coopers & Lybrand show that the calculations were done in a hurry and are inaccurate. As I read the arbitration decision, however, the arbitrator accepted that Coopers & Lybrand did its best to make sense of an incomplete financial picture. I find no reason to interfere with this assessment.

Mr. Kotak also objected to the fact that the arbitrator accepted the second Coopers & Lybrand report when he refused to accept an updated report from Dr. Godfrey. However, there are obvious differences between the two pieces of evidence. The Coopers & Lybrand report is dated August 8, 1995, before the start of the hearing, and the author was called as a witness. Dr. Godfrey's report was not prepared until after both parties had submitted their evidence and only oral submissions remained. I find no error in the arbitrator's rulings.

Mr. Kotak's financial situation and its treatment under the Schedule are not simple. There is room to debate various aspects of the Coopers & Lybrand reports, but Mr. Kotak did not provide a reliable alternative basis for calculating his benefits. The arbitrator reviewed the reports and did not accept all of the figures, adjusting the calculations in Mr. Kotak's favour. After reviewing the appeal record, I am satisfied that Mr. Kotak was treated fairly and that the arbitrator's decision to set his benefits at $361.03 should stand.

D. Special Award

Mr. Kotak submits that CAA Insurance should be ordered to pay a special award under section 282(10) of the Insurance Act because it unreasonably withheld or delayed the payment of his benefits. For the reasons set out above, this is not a case for a special award. CAA Insurance acted reasonably in responding to Mr. Kotak's claims, including funding evaluations of his medical needs and financial situation.

V. APPEAL EXPENSES

Although I accept that Mr. Kotak's appeal was sincerely brought and pursued, that is not a sufficient basis for awarding appeal expenses. Previous appeal decisions have consistently held that expenses will not be awarded to an unsuccessful appellant whose appeal is based on the arbitrator's assessment of the evidence. In my opinion, this is such a case. Mr. Kotak disagreed with the arbitrator's conclusions and wanted to re-argue the case, supplemented by a significant amount of new evidence.

I find no reason to depart from the usual approach and, therefore, CAA Insurance is not required to pay Mr. Kotak's appeal expenses. However, I am not persuaded that Mr. Kotak should be required to pay an assessment under section 282(11.2) of the Insurance Act on the basis that his appeal was frivolous, vexatious or an abuse of process.