Neutral Citation: 1998 ONICDRG 20, 1998 ONFSCDRS 20

FSCO A97-000341, FSCO A97-000925

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANCISCA CHANCAY

GONZALO CHANCAY

Applicants

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION

Issues:

The Applicant, Francisca Chancay, was injured in a motor vehicle accident on November 18, 1994. She applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the 1994 Schedule.¹ Allstate terminated weekly income replacement benefits on June 8, 1995. The parties were unable to resolve their disputes through mediation, and Mrs. Chancay applied for arbitration under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The Applicant, Gonzalo Chancay (Mrs. Chancay's son), was injured in a motor vehicle accident on January 11, 1996. He applied for but did not receive statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the 1995 Schedule.² The parties were unable to resolve their disputes through mediation, and Mr. Chancay applied for arbitration under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues relating to Mrs. Francisca Chancay in this hearing are:

1. Is Mrs. Chancay entitled to caregiver benefits from June 8, 1995 to May 21, 1996?

2. Is Mrs. Chancay entitled to supplementary medical expenses for physiotherapy treatment received from July 1995 to December 15, 1995 in the amount of $5,420?

3. Is Mrs. Chancay entitled to supplementary medical expenses for chiropractic treatment received from November 8, 1995 to May 21, 1996 in the amount of $4,002.75?

4. Is Mrs. Chancay entitled to reimbursement for the purchase of a Kenko mattress system in the amount of $1,999.59 under section 36?

5. Is Mrs. Chancay entitled to housekeeping expenses from June to December 1995 in the amount of $3,125?

The issues relating to Mr. Gonzalo Chancay in this hearing are:

1. Is Mr. Chancay entitled to caregiver benefits from January 18 to September 1, 1996?

2. If the answer to no. 6 is no, is Mr. Chancay entitled to education disability benefits from January 18 to September 1, 1996?

3. Is Mr. Chancay entitled to supplementary medical benefits for physiotherapy treatment received from January 22 to June 28, 1996?

The Applicants also claim interest on any amounts owing and their expenses incurred in the hearing. The Insurer claims expenses incurred in the hearing.

Result:

1. Mrs. Chancay is not entitled to caregiver benefits beyond June 8, 1995.

2. Mrs. Chancay is not entitled to supplementary medical expenses for physiotherapy treatment received beyond July 1995.

3. Mrs. Chancay is not entitled to supplementary medical expenses for chiropractic treatment received from November 8, 1995 to May 21, 1996.

4. Mrs. Chancay is not entitled to payment for a Kenko mattress system.

5. Mrs. Chancay is not entitled to housekeeping expenses beyond June 16, 1995.

6. Mr. Chancay is not entitled to caregiver benefits.

7. Mr. Chancay is not entitled to education disability benefits.

8. Mr. Chancay is not entitled to expenses for physiotherapy treatment.

The Insurer is entitled to one-fourth of its expenses in respect of this arbitration.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on July 13, 14, 15 and 16, 1998, before me, M. Kaye Joachim, Arbitrator.

Present at the Hearing:

Applicants:

Francisca Chancay

Gonzalo Chancay

Mrs. Chancay and Mr. Chancay's Representative:

Ian Little

Barrister and Solicitor

Allstate's Representative:

Ian D. Kirby

Barrister and Solicitor

Allstate's Officer:

Bill Gold

Interpreter:

Sylvia Reich

Omnicom

Witnesses:

Mrs. Francisca Chancay

Mr. Gonzalo Chancay

Ms. Grace Chancay

Dr. Nestor Fernandez

Mr. Bill Gold

Dr. George Vincent

Dr. Richard Mark Holtby

Exhibits:

Listed in Appendix A to this decision

Evidence and Findings:

At the time of her accident on November 18, 1994, Mrs. Francisca Chancay was a full-time caregiver for her four children, Gonzalo, almost 16, Grace, aged 15, Sabrina, aged 5 and Anabel, aged 3. She also did the cooking and cleaning of the two-bedroom apartment, and was responsible for the care of the family dog and several cages of birds. Her husband, who was attending school full time, had a work-related disability which affected his ability to move his right arm.

At the time of the accident, Mrs. Chancay's vehicle was struck from behind while stopped at a red light. Grace was in the front passenger seat and the two younger girls were in the back seat. Following the accident, Mrs. Chancay experienced pain in her neck and back. She sought out Dr. Fernandez, a new, Spanish-speaking medical practitioner at this time. When she saw him on November 23, 1994, he diagnosed soft tissue injuries to the neck and back and recommended physiotherapy treatment. Mrs. Chancay attended physiotherapy treatment on an almost daily basis from November 1994 until December 1995. She also received chiropractic treatment until July 1995, and again from November 1995 to May 21, 1996.

Shortly after the accident, Mrs. Chancay contacted a representative to assist her to make a claim for accident benefits. Soon thereafter, she hired a housekeeper until December 1995. The housekeeper cleaned the two-bedroom apartment and provided child care to the youngest daughter.

In June 1995, following an Insurer Medical Examination (IME), the Insurer terminated weekly caregiver benefits and ceased paying housekeeping expenses. Following a DAC assessment, the Insurer ceased paying for physiotherapy and chiropractic treatment.

On January 11, 1996, Gonzalo Chancay, then 16, testified that he was struck in the right knee by a van pulling out of a driveway. The van stopped as it struck him, and he put out his right arm and touched the van. He did not fall. His sister, Grace, who was with him at the time of the incident, confirmed his version of the events. He did not tell his parents about the incident until one week later, when he began experiencing pain in his knee and neck and upper back. He first saw Dr. Fernandez on January 17, 1996, when he reported pain in his neck and upper back. He did not mention his knee until a later visit. He was immediately referred for physiotherapy treatment on a daily basis until June 1996. He made a claim for accident benefits stating he was the primary caregiver of his mother and sisters at the time of the accident, as his mother was still disabled from her motor vehicle accident.

Francisca Chancay:

Caregiver Benefits from June 8, 1995 to May 21, 1996

In order to establish entitlement to caregiver benefits beyond June 8, 1995, Mrs. Chancay must establish that she continued to suffer a substantial inability to engage in the care giving activities in which she engaged at the time of the accident.³ The medical practitioners agree that Mrs. Chancay suffered soft tissue injuries to her neck and back as a result of the motor vehicle accident, but that she did not sustain any structural or nerve root damage. There were no objective symptoms preventing her from performing her pre-accident care giving activities, but Mrs. Chancay reported that she was restricted in her movements due to pain. In cases such as these, detailed credible evidence comparing the activities performed prior to the accident and after the accident is critical.

Mrs. Chancay's evidence-in-chief was brief and vague. She did not give a detailed description of the care giving activities she engaged in prior to the accident, or detailed evidence of what activities she could no longer perform after June 8, 1995 or any explanation of what prevented her from performing such activities.

In light of the brevity of her evidence, it is difficult to assess the credibility of her claim that she was not able to perform her care giving activities after June 8, 1995. In addition, I found credibility problems with what little evidence she did give. First, Mrs. Chancay gave no credible explanation why she did not seek medical attention after the accident from her own family physician of 16 years. Instead, she sought out a completely new doctor who was treating her brother, who had also been involved in a car accident. While I accept that seeking a Spanish-speaking medical practitioner is a rational reason to change doctors, I find the timing of the change suspicious. Mrs. Chancay had had sufficient confidence in her communication ability with her previous doctor through four pregnancies and deliveries, but it was only after her involvement in a minor motor vehicle accident that her concerns about communication prompted her to seek a Spanish-speaking doctor. I draw the inference that Mrs. Chancay changed medical practitioners because she believed that Dr. Fernandez would be more supportive of her claim for accident benefits.

Second, there are inconsistencies in Mrs. Chancay's evidence about the amount of housekeeping assistance she received. Mrs. Chancay testified that the housekeeper came five days a week, for four hours, from the time of the accident until December 1995, tapering off somewhat in the last couple of months. But the home assessor recorded that Mrs Chancay told her in January, February and March 1995 that she was receiving four hours of housekeeping assistance as well as three hours of babysitting care every day while she attended therapy. Grace Chancay testified that she and her mother attended physiotherapy together after school. In a written statement, the housekeeper asserted that she had to be home by 3:30 p.m. to be with her own children. This contradicts Mrs. Chancay's statements to the home assessor that the housekeeper provided three hours' babysitting while she attended therapy. Further, Grace Chancay testified that she saw the housekeeper only once or twice, because the housekeeper came while she was at school. But if Mrs. Chancay continued the services of the housekeeper for four hours during the summer, it is not believable that Grace did not see her more than once or twice. Gonzalo Chancay stated that he had never seen the housekeeper himself.

Most important, I find that Mrs. Chancay deliberately gave false evidence to support her son's claim that he was the primary caregiver of his younger sisters prior to his accident in January 1996. Although her evidence was vague on this point as well, she testified that prior to his accident he was helping get the children ready in the morning and making breakfast, picking up his younger sister Sabrina from the bus stop, and helping look after the children in the afternoon and evening. This is contradicted by other evidence. Gonzalo Chancay testified that prior to the accident, he was on the swim team and had to leave in the morning for practice at 7:00 a.m. In addition, he played on the soccer team and had practice and games after school until approximately 4:30 p.m. Although there is no dispute that he picked up Sabrina after school, it appears he was doing that before Mrs. Chancay's accident. Grace Chancay testified that when she and her mother went to therapy after school, either her father or the housekeeper looked after the younger children, not Gonzalo. Further, Gonzalo Chancay was involved in Tae-Kwon-Do, for a couple of hours, three times a week. The youngest girls went to bed by approximately 7:30 p.m. This does not leave any time to take on the responsibility of primary caregiver.

Having concluded that Mrs. Chancay's evidence is unreliable, I am not prepared to place any weight on her bald assertion that she could not resume her caregiver duties after June 8, 1995. Mrs. Chancay also relied on Dr. Fernandez' medical opinion that she was disabled beyond June 8, 1995. It is not disputed that his notes and his opinions are based entirely on subjective complaints reported by Mrs. Chancay. To the extent that I have found her evidence unreliable, any conclusion based on her reported symptoms is similarly unreliable. As a further indication of the unreliability of any conclusions based on Mrs. Chancay's reported symptoms, I note that in his report of April 1997, Dr. Fernandez opined that Mrs. Chancay was still substantially disabled. However, based on her evidence at the hearing, she had resumed substantially all of her pre-accident duties by the end of December 1995, at the latest. Further, I find that Dr. Fernandez was not a credible witness. In his evidence he stated that he noted spasms in Mrs. Chancay's neck and back during his early examinations. He testified that this was a significant, objective symptom. However, he does not make any mention of this symptom in his clinical notes and records. He explained that he simply remembered this symptom, some three years after the event. I conclude that Dr. Fernandez was attempting to bolster his opinion on disability by proffering an objective sign of injury. I find that this seriously undermines his credibility.

In contrast to Mrs. Chancay's subjective assertions of disability, there is sufficient objective evidence to establish that Mrs. Chancay was capable of returning to her pre-accident care giving activities by June 8, 1995. While the issue of housekeeping expenses will be dealt with separately, below, I note that there is considerable overlap between Mrs. Chancay's pre-accident care giving activities and her pre-accident housekeeping activities, such that the evidence of housekeeping abilities can be appropriately taken into account in determining her ability to perform care giving activities. By March 24, 1995, the home assessor, observing Mrs. Chancay in her own apartment, recorded that Mrs. Chancay was preparing breakfasts and lunches as well as light dinner meals, setting and clearing the table on alternate days, wiping the stove, counters and dishes, disposing of light garbage, making her own bed, dusting with a long handled duster, sweeping accessible areas, doing some mopping, vacuuming using a lightweight vacuum, cleaning the bathroom mirrors and toilet every other day, occasionally cleaning the bathtub with a long-handled bathtub scrubber, and performing light shopping. There were still activities Mrs. Chancay reported that she could not do, including preparing heavier dinners, cleaning the oven and refrigerator, laundry, ironing, making the children's beds, sweeping inaccessible areas, and heavy grocery shopping. On April 29, 1995, Dr. Vincent, an orthopaedic surgeon selected by the Insurer, examined Mrs. Chancay and concluded that she was capable of performing most of her pre-accident duties on her own, although she would likely experience some pain for two to three months.

Following this assessment, and after the termination of caregiver benefits effective June 8, 1995, the Insurer arranged for a final home assessment. This assessment, which took place on July 12, 1995, confirmed that Mrs. Chancay was minimally limited in her ability to perform all the essential tasks of homemaking.

I conclude that Mrs. Chancay no longer suffered a substantial inability to carry out her pre-accident care giving activities after June 8, 1995.

Physiotherapy treatment from July 15 to December 15, 1995 and Chiropractic treatment from November 8, 1995 to May 21, 1996

In May 1995, the Insurer arranged a DAC Assessment to assess the reasonableness and necessity for further physiotherapy and chiropractic treatment. The assessment was multi-disciplinary and was carried out by Dr. Holtby, an orthopaedic surgeon, in conjunction with an occupational therapist, a physiotherapist and a chiropractor. Dr. Holtby, after reviewing Mrs. Chancay's treatment history, performing a medical examination, and consulting with the occupational therapist and physiotherapist, concluded that all passive modality treatment should stop, including physiotherapy and chiropractic treatment. He recommended two to three sessions with a physiotherapist for instruction in a home-exercise programme. The chiropractor conducted a separate examination and confirmed that all forms of passive therapy should be discontinued, and the patient instructed in a home-exercise programme.

I prefer the conclusion of Dr. Holtby to that of Dr. Fernandez as to the reasonableness and necessity of further physiotherapy and chiropractic treatment. Dr. Fernandez' approach was to recommend treatment so long as the patient expressed pain or a desire for further treatment. As I have found that Mrs. Chancay's reported assertions of pain are an unreliable indicator of disability, I similarly find such assertions an unreliable basis for continued treatment. Further, as the evidence establishes that the clinics where Dr. Fernandez referred Mrs. Chancay for further treatment were owned by his mother and father, it is self-evident that he had no incentive to recommend against continuing treatment.

I conclude that physiotherapy treatment received after July 15, 1995 and chiropractic treatment received from November 8, 1995 to May 21, 1996 were not reasonable or necessary.

Kenko orthopaedic mattress system

On March 7, 1995, Wellness Products Associates submitted a quotation for a Kenko orthopaedic mattress and pillow, and a Thermatech Seat, for Mrs. Chancay. Also included was a note from Dr. Fernandez written on a prescription pad, similar to the one used to prescribe medications, stating "Kenko orthopaedic sleep system, Kenko orthopaedic pillow, and therma tech seat." Dr. Fernandez testified that Mrs. Chancay advised him that she was not sleeping well and that he believed that this mattress would help her sleep better, thereby contributing to her psychological well-being. He did not give any evidence of experience of any beneficial effect from this mattress system. Mrs. Chancay did not give any evidence at the hearing about not sleeping well. Further, she testified that she did not in fact purchase a new mattress and her condition has nonetheless improved. I conclude that the above products were not reasonable or necessary.

The Applicant argued that the mattress system was an expense under section 36(1)(h), "other goods and services of a medical nature that the insured person requires." As such, the Insurer is required by virtue of section 36(4) to pay the expense pending resolution of the dispute that it is not medically necessary. The Insurer responded that the mattress system in question was a "magnetic" mattress system which was experimental in nature and by virtue of section 36(2), the Insurer is not liable to pay for it.

In Caruso and General Accident Assurance Company of Canada, March 1997, OIC A96-000644, Arbitrator Makepeace considered a claim for a Kenko magnetic mattress system and concluded that such systems could be considered a "medical device" under section 36(1)(f) and should not be considered experimental in nature within the meaning of section 36(2). I agree with that conclusion.

Alternatively, the Insurer suggested that it was not required to "pay now dispute later," because it never received a section 37 certificate from a healthcare practitioner asserting that the expense was reasonable and necessary, although it specifically requested one. The Applicant argued that the prescription pad notation by Dr. Fernandez was sufficient and the Insurer must have treated it at such, as they arranged a DAC assessment and requested an opinion on the reasonableness of the device.

In my view, the prescription pad notation is not a sufficient statement as to the reasonableness or the necessity of a Kenko mattress system. The note did not comment on either of these issues.

In White and Pilot Insurance Company (June 6, 1995), OIC A-0008462, the arbitrator held that the "pay now, dispute later" provision did not come into effect until the applicant had furnished a signed statement that the expense is necessary for the insured person's treatment or rehabilitation. However, that case interpreted section 6 of a predecessor Schedule.⁴ Section 6(4) of that Schedule specifically provided that the insurer could require a statement "before making a payment for an expense under subsection (1)." Section 37 in the present Schedule does not contain similar wording, and does not explicitly appear to permit an insurer to require a section 37 certificate before paying the expense.⁵

However, it is unnecessary for me to determine the inter-relationship between section 36 expenses, section 37 certificates and section 39 assessments. Whether or not the Insurer contravened section 36(4) of the Schedule by refusing to pay Mrs. Chancay's claim for a Kenko mattress, pillow and thermatech seat, pending its right to dispute that the expense was not reasonable or necessary, I find the issue of a special award does not arise because I did not award benefits to the Applicant.⁶

Housekeeping expenses

The Insurer paid $150 per week for housekeeping expenses from November 18, 1994 until June 15, 1995, and a lesser amount for the last two weeks of June 1995. Mrs. Chancay claimed housekeeping expenses from June 16 to the end of December 1995, under section 55 of the Schedule.

There is considerable overlap between the Applicant's abilities to resume her pre-accident caregiving duties and her abilities to resume her housekeeping activities, and the evidence discussed under the entitlement to caregiving benefits is relevant to the issue of entitlement to housekeeping expenses as well.

By March 1995, the Applicant had resumed many of her housekeeping duties. In April 1995, Dr. Vincent, the orthopaedic surgeon conducting the IME concluded that Mrs. Chancay was capable of performing most of her housekeeping duties on her own. In May 1995, during the DAC assessment, Dr. Holtby, in conjunction with the occupational therapist, considered that Mrs Chancay had full functional movement and should be able to do the majority of her homemaking tasks with pacing and interruption. The Applicant attempted to discredit this opinion, because it was based in part on the assumption that Mrs. Chancay's children and husband could help with the heavier tasks such as grocery shopping, laundry, cleaning underneath the furniture and cleaning the bird cages. However, Dr. Holtby's evidence was clear that he believed that Mrs. Chancay was functionally capable of doing even those heavier duties. I find that she was capable of resuming substantially all of her pre-accident housekeeping chores, and that this was confirmed by the home assessment on July 12, 1995.

Mrs. Chancay noted that the home assessment of July 12, 1995 recommended at least four hours of housekeeping assistance every second week to help with the heavier chores. I attribute little weight to the hours of housekeeping recommended by the home assessor, since they are based on Mrs. Chancay's own stated limitations with respect to her ability to perform household chores.

I prefer the opinions of Dr. Vincent, Dr. Holtby, and the occupational therapist from the Designated Assessment Centre that Mrs. Chancay was capable of resuming her household duties by April and May 1995. As housekeeping expenses were paid fully until mid-June 1995 and partially until the end of June 1995, I find that housekeeping expenses beyond that date were not reasonable.

Gonzalo Chancay:

Impairment as a result of an accident

In order to establish entitlement to any benefits, Mr. Chancay must establish that he suffered an impairment as a result of an accident.

Following his accident of January 11, 1996, Gonzalo Chancay made an application for caregiver benefits asserting that at the time of the accident, he was caring for himself, his mother, his sister Grace, almost 16, his sister Sabrina, aged 6, and his sister Anabel, aged 4-1/2.⁷ By no stretch of the evidence, much less the imagination, was Gonzalo Chancay the primary caregiver of any of these individuals. Based on the evidence of all the witnesses, prior to Gonzalo's accident, Mrs. Chancay was responsible for getting the children out of bed, making their breakfasts, picking up Anabel from junior kindergarten and taking care of her for the rest of the afternoon. Gonzalo Chancay was on the swim team, and left for practice some mornings at 7:00 a.m. He attended school full time. He played on the soccer team after school until at least 4:30 p.m. He picked up his sister Sabrina from the school bus around 4:30 p.m. His father or the housekeeper took care of the children while Grace and Mrs. Chancay went to physiotherapy every day. Three nights a week he spent a couple of hours at Tae-Kwon-Do. His sisters went to bed at 7:30 p.m. Clearly, Gonzalo Chancay was not the primary caregiver of anyone other than himself, prior to his accident. The maintenance of this claim at the hearing reflects very badly on Mr. Chancay's credibility.

Mr. Chancay testified at the hearing that following the accident, he experienced pain in his neck, shoulders, upper back and right knee, and that this prevented him from carrying out his previous caregiving and household activities, forced him to drop off the swim team, and prevented him from participating in Tae-Kwon-Do. He emphatically denied ever experiencing low back pain. Yet the clinical notes and records of Dr. Fernandez state that Gonzalo Chancay repeatedly reported low back pain, in addition to neck, bilateral shoulder and right knee pain. In a Health Practitioner's Certificate dated February 28, 1996, Dr. Fernandez assessed the low back pain as the worst symptom.⁸ Similarly, the physiotherapist consistently recorded low back pain, in addition to cervical, bilateral shoulder and right knee pain, and provided treatment to those areas. Either Dr. Fernandez and the physiotherapist both repeatedly recorded low back pain when none was complained of, or, more likely, Gonzalo Chancay did report low back pain to them. It is inconceivable that a person experiencing low back pain and receiving daily physiotherapy treatment for such pain could forget this symptom. I conclude that Mr. Chancay completely manufactured this symptom of low back pain, and simply forgot this fabricated symptom one year later at the hearing.

Accordingly, I conclude that Mr. Chancay is not a credible witness and his description of the pain he experienced related to the accident is entirely unreliable. Of course, the records of Dr. Fernandez and the physiotherapist, based on Mr. Chancay's reports, are similarly unreliable. Francisca Chancay's evidence with respect to her son's disability was even more vague than her evidence with respect to her own disability. Grace Chancay did not give evidence about any symptoms of pain or incapacity experienced by her brother. Her excuse that she locked herself in her room every evening to play music and study was simply not a sufficient explanation of why she apparently did not perceive her brother in any pain or witness any limitations in his activities. The lack of impairment was confirmed by Dr. Sober during an Insurer Medical Examination in April 1996. Therefore, there is no credible evidence that Gonzalo Chancay suffered any impairment arising from the incident of January 11, 1996. His claim for caregiver and education benefits fails on this basis.

Caregiver Benefits

Further, Mr. Gonzalo's claim for caregiver benefits fails because, as discussed above, he failed to establish that he was the primary caregiver of anyone at the time of the accident.

Education Disability Benefits

Mr. Gonzalo's claim for education disability benefits also fails because of a lack of evidence that he suffered a substantial inability to continue his education. Mr. Chancay, who was in the second semester of Grade 11 at the time, completed the year, and Grade 12 as well. His attendance was worse in the second semester of Grade 11 than the previous year, but no worse than it was in Grade 12. I see no connection between his rising absenteeism and the accident. Although his grades dropped slightly in the second semester of Grade 11, compared to his Grade 10 marks, they continued to drop in Grade 12, well past the time when Mr. Chancay was claiming any resulting effects from the accident. The gradual decrease in achievement from Grades 10 through 12 is more consistent with a student experiencing difficulty with increasingly complex subjects, than with a student experiencing a temporary decrease in marks due to an accident-related impairment.

Further, given the physical nature of the alleged injuries, one would expect his physical education grade to be the most affected. However, in the semester immediately following his accident Mr. Chancay was commended by his physical education instructor for good class participation and excellent achievement.

Neither did Mr. Chancay establish that he suffered a substantial inability to carry on a normal life. The only alleged changes in Mr. Chancay's activities were that he dropped off the swim team, could no longer participate in Tae-Kwon-Do and could not carry out his usual household activities. I do not accept Mr. Chancay's uncorroborated evidence that he left the swim team. There was no confirming evidence of this from his swim instructors, or even by his mother and sister, and I have already stated my reasons for finding Mr. Chancay to be an unreliable witness.

Whether or not engaging in Tae-Kwon-Do is a "mobility activity" within the meaning of section 2, (and I make no finding on this issue), I find that the activity that Mr. Chancay engaged in prior to the accident was taking Tae-Kwon-Do lessons, teaching two to three times per week, and participating in occasional competitions. I heard no evidence that Mr. Chancay actually missed any competitions between January 1996 and September 1996, the period of his claim. He did testify that he continued to instruct for two to three times per week, and earned the same rate of pay as prior to the accident. He testified that he did not take any instruction himself, because of pain related to the accident. I do not accept that not taking Tae-Kwon-Do instruction, but continuing to teach, amounts to a "substantial" inability to engage in the activity of Tae-Kwon-Do.

The Applicant also alleged that he was unable to engage in the household activities he engaged in prior to the accident. I have already concluded that Mr. Gonzalo did not engage in any caregiving activities prior to his accident. Similarly, I conclude that other than occasionally helping out around the house, such as sweeping and making beds, Mr. Chancay did not engage in any significant household activities and did not suffer any inability to carry out those activities after the accident.

Physiotherapy from January to June 1996

It follows from my finding that Mr. Chancay did not suffer an impairment as a result of the accident that the physiotherapy treatment he received from January to June 1996 was not reasonable or necessary.

The Applicant's counsel argued that the physiotherapy treatment is a "pay now, dispute later" expense under section 36(1)(b) of the Schedule. The Applicant suggested that the first $2,000 of physiotherapy treatment was immune from challenge, by virtue of section 39(2)(b), which only allows an insurer to request an assessment after $2,000 of physiotherapy treatment has been received. The Applicant also stressed that physiotherapy treatment within the first 12 weeks of the accident is payable, regardless of the outcome of any assessment requested by the Insurer, by virtue of section 39(11)(c).

Section 36 expenses are only payable with respect to an insured person who "sustains an impairment as a result of an accident..." While the reasonableness or necessity of the first $2,000 of physiotherapy for an acknowledged impairment arising from the accident cannot be the subject of a DAC assessment, nothing prevents the insurer from challenging, as it did here, the existence of any impairment. Similarly, physiotherapy treatment during the first 12 weeks following an accident can be challenged on the basis that the Applicant did not sustain an impairment at all.

Whether or not the Insurer breached the "pay now dispute later" provision, the issue of a special award does not arise, in light of my finding that no benefits are payable to Mr. Chancay because he did not sustain an impairment as a result of an accident.

Expenses:

The practice at the Commission has been to award unsuccessful applicants their expenses, in order not to deter potentially meritorious complaints from being heard. I find that Mrs. Francisca Chancay's application for arbitration had no merit and is not the type of claim which should be encouraged. I note that Applicant's counsel conceded that no expenses should be paid if the Applicants were entirely unsuccessful, as they have been. Accordingly, I exercise my discretion to deny Mrs. Chancay her expenses. However, I am not satisfied that there are any circumstances which would justify awarding the Insurer its expenses in relation to Mrs. Chancay's claim.

I find that Gonzalo Chancay's application was frivolous and made in bad faith. Mr. Chancay's inability to remember the symptoms he claimed to sustain in the accident was evidence that this application was brought in bad faith. His claim that he was the primary caregiver, in light of his full-time attendance at school and a full slate of extracurricular activities, was frivolous. Similarly, his claim for education disability benefits was without merit. In all the circumstances, I award the Insurer its expenses in defending against Mr. Chancay's claims. As the applications were heard together, and as Mrs. Chancay's claims took up the significant portion of the hearing days, I would apportion one out of four hearing days to Mr. Gonzalo's claim.

Order:

1. The Insurer is entitled to one-fourth of its expenses in respect of the arbitration.

August 12, 1998

M. Kaye Joachim Arbitrator

Date

APPENDIX A

Exhibits:

Exhibit 1

Insurer's Brief re. Francisca Chancay

Exhibit 2

Insurer's Supplementary Brief re. Francisca Chancay

Exhibit 3

Insurer's Medical Brief re. Francisca Chancay

Exhibit 4

Insurer's Brief. re. Gonzalo Chancay

Exhibit 5

Insurer's Supplementary Brief re. Gonzalo Chancay

Exhibit 6

Insurer's Medical Brief re. Gonzalo Chancay

Exhibit 7

OHIP summary re. Gonzalo Chancay

Exhibit 8

Letter dated March 18, 1996 from Annex Physiotherapy & Rehabilitation

Exhibit 9

Certificate for Medical/Rehabilitation and Attendant Care (OCF-15) dated September 16, 1996

Exhibit 10

Demand notice dated April 4, 1996 from Bloor Borden Physiotherapy Clinic

Exhibit 11

Clinical notes and records of Dr. N. Fernandez re. Francisca Chancay

Exhibit 12

Clinical notes and records of Dr. N. Fernandez re.Gonzalo Chancay

Exhibit 13

Curriculum Vitae of Dr. G.M. Vincent

Exhibit 14

Curriculum Vitae of Dr. R.M. Holtby

Exhibit 15

Letter from Insurer to M.A.C.O. dated April 4, 1995

Exhibit 16

Letter from Insurer to Orthopaedic & Arthritic Hospital dated April 10, 1995

Exhibit 17

Letter from Insurer to Juda & Associates dated June 21, 1995

APPENDIX B

PART VII SUPPLEMENTARY MEDICAL BENEFITS

Entitlement to Benefits

36.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for all reasonable expenses incurred by or on behalf of the insured person as a result of the accident for,

(a) medical, surgical, dental, optometric, hospital, nursing, ambulance, audiometric and speech-language pathology services;

(b) chiropractic, psychological, occupational therapy and physiotherapy services;

(c) medication;

(d) prescription eyewear;

(e) dentures and other dental devices;

(f) hearing aids, wheelchairs or other mobility devices, prostheses, orthotics and other medical devices;

(g) transportation for the insured person to and from treatment sessions, including transportation for an aide or attendant;

(h) other goods and services of a medical nature that the insured person requires.

(2) The insurer is not liable to pay any expense under subsection (1) for goods or services that are experimental in nature.

(3) Transportation expenses under clause (1)(g) in respect of an insured person's automobile are limited to expenses for fuel, oil, maintenance, tires and parking.

(4) Subject to subsection (5), clause 39(11)(b) and subsection 39(12), the insurer shall pay an expense under subsection (1) pending resolution of a dispute relating to the expense in accordance with sections 279 to 283 of the Insurance Act.

(5) The insurer is not liable to pay more than $3,000 in respect of an expense under clause (1)(d), (e) or (f) pending the determination of a dispute relating to the expense in accordance with sections 279 to 283 of the Insurance Act.

Certificate

37.—(1) The insurer may require a person claiming payment of an expense under section 36 to furnish a certificate from the person's health practitioner stating that the expense is reasonable and is necessary for the person's treatment.

(2) In the case of an expense that is of a continuing nature, the insurer may require a certificate to be furnished under subsection (1) as often as reasonably necessary.

Assessment

39.—(1) If the insurer receives a certificate under section 37 in respect of an expense, the insurer may give the insured person a notice requiring the insured person to be assessed under this section.

(2) Subsection (1) does not apply to an expense under clause 36(1)(b) or (c) unless,

(a) the expense was incurred more than eight weeks after the accident; or

(b) the insurer has already paid more than $2,000 for expenses under clauses 36(1)(b) and (c) in respect of the insured person as a result of the accident.

(3) Subsection (1) does not apply to an expense under clause 36(1)(d), (e) or (g).

(4) Subsection (1) does not apply to an expense under clause 36(1)(f) if the Ministry of Health pays part of the cost of the item for which the expense was incurred.

(5) If the insurer gives a notice under subsection (1) and if, within 100 kilometres of the residence of the insured person, there is no designated assessment centre that is authorized to assess impairments of the type sustained by the insured person, the insurer and the insured person shall endeavour to agree on one or more people, at least one of whom shall be a health practitioner, to conduct the assessment.

(6) If there is a designated assessment centre within 100 kilometres of the residence of the insured person or if, within 14 days after the insured person received notice under subsection (1), the insurer and the insured person cannot agree under subsection (5) on who shall conduct the assessment, the designated assessment centre nearest to the residence of the insured person shall conduct the assessment.

(6.1) If, before the assessment has commenced, the designated assessment centre nearest to the residence of the insured person has disclosed to the insurer and the insured person that it has a conflict of interest with either of the parties within the meaning of that term in the guidelines established by the accident benefits advisory committee under subsection 38 (2),

(a) the designated assessment centre or another centre shall conduct the assessment, if the parties agree; or

(b) the designated assessment centre that is next nearest to the residence of the insured person shall conduct the assessment, if the parties do not agree under clause (a).

(7) If the assessment is required to be conducted by a designated assessment centre,

(a) the insurer shall, within fifteen days, notify the designated assessment centre; and

(b) the centre shall promptly notify the insured person and arrange for the assessment.

(8) For the purpose of the assessment,

(a) the insured person and the insurer shall provide the person or persons who conduct the assessment with such information as is reasonably necessary; and

(b) the insured person shall submit to such reasonable physical, psychological and mental examinations as are requested by the person or persons who conduct the assessment.

(9) After conducting the assessment, the person or persons who conducted the assessment shall prepare a report and provide a copy of the report to,

(a) the insurer;

(b) the insured person; and

(c) the insured person's health practitioner.

(10) The report shall include,

(a) a statement of whether, in the opinion of the person or persons who conducted the assessment, the expense claimed is reasonable and is necessary for the insured person's treatment; and

(b) recommendations relating to the future provision of goods and services referred to in section 36 to the insured person.

(11) Subject to the determination of a dispute relating to the expense in accordance with sections 279 to 283 of the Insurance Act,

(a) if the report of the assessment states that, in the opinion of the person or persons who conducted the assessment, an expense is reasonable and necessary for the insured person's treatment, the insurer shall pay for the expense;

(b) if the report of the assessment does not state that, in the opinion of the person or persons who conducted the assessment, an expense is reasonable and necessary for the insured person's treatment, the insurer is not required to pay for the expense unless clause (c) applies; and

(c) if the assessment was conducted in respect of an expense under clause 36(1)(b) or (c) that was incurred within twelve weeks after the accident, the insurer shall pay for the expense.

(12) The insurer is not required to pay the expense for the period that the insured person does not,

(a) make himself or herself reasonably available for an assessment under this section; or

(b) provide information that is reasonably necessary for an assessment under this section and that the person or persons conducting the assessment have required the insured person to provide.

PAYMENT OF BENEFITS

39.1 (1) Subject to subsection 65 (5), an insurer shall mail or deliver a benefit that is payable under this Part to the person entitled within 14 days after the insurer receives an application for the benefit.

(2) An amount payable under this Part is overdue if the insurer fails to comply with subsection (1).

(3) If, before payment becomes overdue under subsection (2), the insurer requires that a certificate be furnished under subsection 37 (1) in respect of the benefit,

(a) subsections (1) and (2) do not apply;

(b) the insurer shall mail or deliver the benefit to the person entitled within 14 days after the insurer receives the certificate; and

(c) the amount payable becomes overdue if the insurer fails to comply with clause (b).

(4) If, before payment becomes overdue under clause (3) (b) in respect of an expense under clause 36 (1) (a), (b) or (c) for services or medication received outside Canada on an elective basis, or an expense under clause 36 (1) (f) for an item for which the Ministry of Health is not paying part of the cost, or an expense under clause 36 (1) (h), the insurer requires that an assessment be conducted under section 39,

(a) subsections (1), (2) and (3) do not apply;

(b) the insurer shall mail or deliver the payment of the expense to the person entitled within 14 days after the insurer receives a report under section 39 stating that, in the opinion of the person or persons who conducted the assessment, the expense is reasonable and is necessary for the insured person's treatment; and

(c) the amount payable becomes overdue if the insurer fails to comply with clause (b).

(5) When a benefit is paid under this Part, the insurer shall provide the insured person with a written explanation of how the amount of the benefit was determined.

(6) If the insurer refuses to pay a benefit under this Part it shall give the insured person notice of the reasons for the refusal within 14 days after the insurer receives the application or the certificate, if the insurer has required a certificate under subsection 37 (1).

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993, and before November 1, 1996, called "the Schedule" in this decision. The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94.
2. 2The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94 and 781/94.
3. 3section 18(3)i. of the Schedule. Although it was not specifically argued that Mrs. Chancay suffered a partial or complete inability to carry on a normal life under section 18(3)ii, my findings with respect to her ability to perform her pre-accident caregiving and housekeeping activities are equally applicable to her ability to carry on a normal life.
4. 4Ontario Regulation 672, No-Fault Benefits Schedule.
5. 5Sections 36, 37 and 39 of the Schedule are reproduced in full in Appendix B.
6. 6Subsection 282(10) of the Insurance Act says "If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding benefits and interest to which an insured person is entitled...shall award a lump sum of up to 50 percent of the amount to which the person was entitled...
7. 7Exhibit 4, Tab 1, Application for Accident Benefits, March 11, 1996.
8. 8Exhibit 6, Tab 1