Neutral Citation: 1998 ONICDRG 44, 1998 ONFSCDRS 44

FSCO A98-000124

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

Ms. Z

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION on INTERIM BENEFITS and RULING ON PRODUCTION

Issues:

Ms. Z was injured in a motor vehicle accident on January 8, 1993. She received statutory accident benefits from Dominion of Canada General Insurance Company ("Dominion"), payable under the Schedule.¹ Dominion terminated weekly income benefits on July 2, 1997. The parties were unable to resolve their disputes through mediation and on January 22, 1998, Ms. Z applied for arbitration at the Financial Services Commission of Ontario,² under the Insurance Act, R.S.O. 1990, c.I.8, as amended. At the same time Ms. Z served motion documents requesting an order that Dominion pay interim income benefits of $434.28 per week and her expenses of the motion. Dominion opposed that motion and sought an order that psychologist Judith Schachter, Ph.D., deliver a copy of her clinical notes of her treatment of Ms. Z to Dominion.

Result:

1. Dominion shall pay interim weekly income benefits to Ms. Z, in the sum of $434.28, commencing September 25, 1998, until a further order of an arbitrator.

2. Dr. Schachter is not required to deliver a copy of her clinical notes of her treatment of Ms. Z to Dominion. However, she must produce a copy of the raw data of any testing instrument administered to Ms. Z directly to any psychologist retained by Dominion.

The details of the hearing, including those present and exhibits filed, are found in the Appendix.

Evidence and Findings:

Background

The history of this case before the Commission is unusual. Although the hearing has only just begun, four arbitrators and the Registrar have had multiple contacts with the parties to the arbitration.

Initially, the parties participated in a prehearing teleconference with Arbitrator VanderBent on May 20, 1998. A hearing date was set for June 28 to 30, 1999. The prehearing resumed on July 3. 1998, before Arbitrator Jones, for oral submissions on the motion for interim benefits. The motion did not proceed that day, due to Ms. Z's failure to provide certain documents. Arbitrator Jones rescheduled the motion to August 14, 1998 and ordered Ms. Z to pay $150.00, in any event of the cause, as an interim award of expenses, pursuant to section 282(11.1) of the Act.

On August 14, 1998 the matter resumed before Arbitrator Renahan who was concerned about the long interval until the hearing date (more than ten months in the future). Despite Dominion's objection, Arbitrator Renahan rescheduled the hearing to commence September 8 and 9, 1998 and adjourned the motion for interim weekly income benefits to those dates as well.

On August 20, 1998, Dominion sought an adjournment of the hearing from the Registrar and requested that only the motion for interim benefits proceed on September 8, 1998. The Registrar held lengthy conversations with both counsel on August 27, 1998, declined to adjourn the hearing, but gave both counsel the right to recall two witnesses, if necessary, on further resumption of the hearing. The Registrar asked both counsel to provide the Commission with blocks of dates so that the arbitration could be concluded by January 31, 1999.

On September 4, 1998, at Ms. Z's request, the parties agreed to spend the first day of the hearing attempting settlement with a mediator. The parties were not successful in resolving the dispute.

When the hearing began in London on September 9, 1998, Ms. Z moved for interim weekly income benefits. Dominion also moved for the production of the clinical notes of Dr. Judith Schachter, a psychologist treating Ms. Z. Dr. Schachter was present at the hearing and testified on the production issue. Dominion also moved to adjourn the hearing. Various other preliminary matters were also raised by the parties, including issues pertaining to Ms. Z's attendance at three insurer's examinations, tentatively scheduled for late October 1998. Some agreements were reached on the preliminary matters and, at the end of the day, the hearing was scheduled to resume in early January 1999, when the reports of the insurer's examinations of October 1998 should be available.

Dominion objected to my hearing both the interim benefits motion and the main issues. The Applicant did not object. Although I agreed that the prehearing arbitrator ordinarily hears motions for interim benefits, in the convoluted circumstances of this case, I ruled that I should hear both the interim and main issues. In my view no other course was reasonable in the circumstances and this manner of proceeding was entirely within the contemplation of section 279(4.1) of the Act and section 65 of the Dispute Resolution Practice Code (ThirdEdition - April 15, 1997). I emphasized to the parties that monies paid under interim orders are subject to the final order of an arbitrator and an arbitrator may order interim benefits to be repaid, after a full hearing on the matter.

One witness, who had travelled to London from Sarnia in response to a summons, Mr. James M. Douglas, a licensed automobile appraiser, testified briefly with respect to his appraisal report dated January 13, 1993. His evidence was only peripherally relevant to the issues before me on the motion for interim benefits and irrelevant to the production of Dr. Schachter's notes.

Criteria for Interim Benefits Order:

An arbitrator's authority to make interim orders is found in subsection 279(4.1) of the Act which provides as follows:

The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator.

Subsection 279(4.1) of the Act is a discretionary provision. Arbitrator Manji, in Ioannidis and Canadian General Insurance Group,³ reviewed the principles and criteria for making interim orders, as follows:

• Generally an insured person's entitlement to benefits is to be determined after a full hearing of all of the evidence.⁴

• Novel or difficult questions of law should be dealt within a full hearing and not within an interlocutory proceeding.⁵

• Interim benefits are not to be awarded on a routine basis, but only in certain unusual circumstances.⁶

• An interim order, by its very nature, is intended to cover a short period of time between the making of the order and the final order.⁷

• An application for an interim order must be heard in a summary fashion and the order made expeditiously. At the arbitration hearing, after a full hearing of all of the evidence, the arbitrator may well come to the conclusion that a substantially different order should be made.⁸

• An interim order is subject to the final order and an arbitrator may order interim benefits be repaid.⁹

• Subsection 279(4.1) of the Act does not change the onus of proof. The onus of proof remains the insured person's.¹⁰

[Three] criteria have been identified in exercising the discretion in subsection 279(4.1) of the Act:

1• The merits of the case for entitlement. (...)

2• The existence of an element of necessity or urgency,¹¹ or

3• A blatant disregard by the insurer of the Schedule or Act.¹²

As I stated recently in the Tanner and Allstate Insurance Company of Canada and Simpson and Trafalgar Insurance Company of Canada cases,¹³ I agree with Arbitrator Manji that the standard of proof required of the insured person is that she proves a prima facie case for entitlement. With these principles and criteria in mind, I have considered the evidence on this motion for interim benefits.

Merits of the Case - Prima Facie Case for Entitlement

Before the accident Ms. Z was employed as a case worker in the social services field. She submits that she sustained a serious flexion-extension injury to her neck in the accident of January 8, 1993, when she was hit from behind while stopped at a red light. Since the accident, she claims to have also suffered from frequent and severe headaches. She has been diagnosed as suffering from chronic pain disorder, severe depression, and post-traumatic stress disorder. She continues receiving therapy from a psychologist, Dr. J. Schachter.

Dominion terminated Ms. Z's weekly income benefits in July 1997, after 234 weeks of payment, stating in its Assessment of Claim form that "Any continuing disability is a result of factors other than the MVA ie. not a result of injuries sustained in the MVA."

Ms. Z submitted six reports from medical and psychological practitioners relating to her condition following the accident as well as several rehabilitation reports. She submits that these reports link her condition to the injuries sustained in the accident.

One of these reports was written by Dr. Robert Teasell, Chief and Chair, Department of Physical medicine and Rehabilitation, London Health Sciences Centre, who examined Ms. Z on January 28, 1997 on referral from her family doctor.

Dr. Teasell diagnosed soft tissue injuries and found significant tenderness at the level of C4-5 and in the lumbosacral spine. He felt these injuries would result in permanent difficulties with heavy lifting, repetitive bending or twisting at the waist, reaching with the arms above shoulder level or doing repetitive reaching. He also felt Ms. Z would have difficulty with prolonged sitting or prolonged standing. Dr. Teasell felt Ms. Z’s memory and concentration problems were more attributable to pain than brain injury and he did not support any idea that Ms. Z showed evidence of brain injury.

Dr. Teasell addressed the issue of the cause of Ms. Z's psychological difficulties.

Psychological difficulties no doubt play a role in these types of injuries and particularly how a person adapts and copes. However, were it not for the motor vehicle accident this lady would still be working and in my opinion that issue is not in doubt. Therefore, it is inappropriate to view her disability as solely a result of her particular premorbid characteristics as they apply to how she deals with chronic pain; again it is the pain that is the major disabling problem here and not this lady’s premorbid psychological makeup. Nevertheless, the stressors in her life limit her ability to maximally cope with her pain.

Dr. Sol Goldenberg, F.A.C.S., F.R.C.S.C., "trauma consultant," examined Ms. Z on September 19, 1994 at Dominion's request. Dr. Goldenberg's qualifications were not before me. He was of the opinion that Ms. Z sustained soft tissue damage to her neck and back in the accident and that the degenerative changes primarily in her neck could have rendered her "somewhat more vulnerable to the type of trauma she sustained and to a lesser extent the same is true with respect to her back." Dr. Goldenberg suspected Ms. Z was developing a chronic pain syndrome and recommended more activity and more aggressive physiotherapy.

At Dominion's request, Dr. John O'Reilly, a specialist in Physical Medicine and Rehabilitation, examined Ms. Z on April 30, 1997. Dr. Donald Young, Ph.D., a neuropsychologist, also examined Ms. Z. Dr. O'Reilly was of the opinion that Ms. Z "had no physical findings to suggest that she was impaired or disabled with respect to her occupational activities as a social worker." Dr. Young felt Ms. Z's poor performance on strength and motor tasks was not indicative of a cerebral defect, in the face of her complaints of fatigue and chronic pain. He felt the MMPI-II testing indicated a personality with a strong tendency to express emotional life in psychophysiological ways and believed a conversion phenomena was possible. Dr. Young wrote:

It would be my opinion that the present clinical picture is determined by numerous factors. Ms. Z's difficult early life has likely predisposed her to difficult characterological problems of a borderline nature which involves anger, lack of an inner sense of contentment, a sense of a lack of support, and considerable manipulativeness designed to gain support and nurturance. Her adult life was characterized by an unhappy marriage that became untenable. The motor vehicle accident of January 8, 1993 was a misfortune in her life that engendered stress and physical suffering. The interplay of this stress with her characterological make up and life circumstances have likely resulted in far greater perceived disability and pain than would have normally been engendered by the nature of the original physical injuries.

In the diagnostic realm, Ms. Z probably meets the criteria for a major depressive disorder. A pain disorder associated with psychological factors also appears present. I do not feel she has ... a Post-Traumatic Stress Disorder. ... I also believe that Ms. Z has a personality disorder with borderline, histrionic and narcissistic features.

The Applicant submitted that I must consider the test of causation that is applied in relation to matters under the Schedule. She submitted that the facts of the case of Mathers and Algoma Mutual Insurance Company (OIC A97-000975, February 4, 1998, under appeal ) were very like Ms. Z's case. She also submitted for my consideration, Arbitrator Evans' decision in Levey and Traders General Insurance Company, (OIC A96-001590, June 30, 1998), where he wrote:

I do not have to find that the accident was the sole or even the principal cause of Ms. Levey’s condition. Although Ms. Levey’s pre-existing disposition may have aggravated her injuries, it is sufficient if the contribution by the accident was more than minimal and thereby made a material contribution to the development of the torticollis: Athey v. Leonati et al., [1996] S.C.R. 458.

Ms. Z submitted that what Dr. Young actually says about her in his report falls well within the causation parameters accepted under the Schedule. Dr. Young found the validity measures designed to detect lack of engagement and effort in the assessment indicated that Ms. Z's performance was valid. He found that she is suffering from a pain disorder and perhaps from a conversion phenomenon, preferring a physical explanation for her symptoms. He thought her chances of returning to full-time work were unlikely or very poor.

On the causation issue, Dominion submitted that Ms. Z was in crisis before the accident and that the accident, as a single event trauma, is not the cause of her ongoing disability—that is more consistent with the proposition that her problems arise from long-standing characterological problems and life circumstances before the accident. Dominion submitted that Ms. Z is not the classic "thin skulled" applicant, but the "crumbling skulled" applicant, whose life would have ended up in like circumstances whether or not the accident had intervened.

The Applicant submitted that where an insurer terminates benefits well beyond the 156 mark, at which point the test for entitlement changes, an insurer should be subject to a special onus of proof. Ms. Z submitted that it was not equitable to be forced to reproduce events from her memory in 1999, six years after the accident, whereas if the insurer had raised issues of causation nearer the outset, she might have been able to answer such questions. She submitted the insurer's delay puts her at a significant disadvantage in a situation where she has memory problems, as a result of depression, as a result of the accident. Ms. Z submitted that, for example, the insurer knew she was off work at the time of the accident due to "another illness" but sought no further information on that issue at the time. Now, it proposes to raise this issue many years later.

Dominion submitted that the onus of proof of entitlement always remains with Ms. Z, as set out in the cases of Gomez and Pilot Insurance Company, (OIC A-13080, May 10, 1995) and Cobby and Lloyd's, (OIC A-014259, October 13, 1995) and Henriques and Motor Vehicle Accident Claims Fund (OIC A96-00037, December 12, 1996, OIC P97-00002, August 21, 1997).

Necessity or Urgency

Ms. Z's sole monthly income is $600.00 in support payments received from her estranged husband. This amount was awarded by the court at a time when weekly income benefits were still being paid by Dominion. Ms. Z swore an affidavit, originally filed as part of her family law proceedings, in June 1998, claiming to have monthly expenses of $2,033.08. Since that time she deposed she has cut out more expenses, like long distance telephoning to her children out of province, cable television, and entertainment expenses, including newspaper subscriptions. Ms. Z did receive a lump sum of $94,267.95 as the net proceeds of the settlement of her court action against the tortfeasor responsible for this accident in October 1997. She made a $10,000 down payment on the condominium in which she presently lives. The remainder of the funds were invested as part of her long term financial plan. Dominion argues that Ms. Z's Statement of Assets discloses no urgent financial need. Ms. Z submits that she should not be required to undo her long term financial plan, and jeopardize her future security, in order to live from day to day, until this arbitration is concluded, because Dominion is in breach of its obligations to her.

In the academic year 1997-98, Ms. Z received a bursary and waiver of parking fees from her university on the basis of financial need. Her MasterCard has been revoked for nonpayment and remains a liability of approximately $3,000. Ms. Z's financial affairs with her estranged husband have not yet been completely settled, with the matrimonial home remaining listed for sale, but as yet unsold.

Dominion submitted that Ms. Z has more than $120,000 in assets invested in her share of the matrimonial home, her equity in her condominium, and her mutual fund investments. Dominion submitted that orders for interim benefits should be made with great caution, because an insurer may not be able to recover the payments, even if an order is made against an applicant. Dominion submitted interim benefits orders should only be made in cases of impecuniosity, which this is not. Dominion should not be compelled to support someone who is "trying to preserve her capital."

Dominion was unable to satisfactorily answer my query as to the consistency of its submissions that, on the one hand, extol the existence of Ms. Z's assets as a barrier to her receiving interim benefits, and, at the same time, bemoan its potential inability to recover from Ms. Z any repayments ordered after a full hearing.

In prior cases dealing with interim benefits, arbitrators have generally considered the adequacy of an applicant’s income stream. Information about capital or assets has not necessarily been before the arbitrator, as it is here. I agree with Ms. Z’s submission that and she should not be required to demonstrate that her income is "below subsistence level" in order to qualify as an urgent case. If that were so, then once one qualified for family benefits or general welfare assistance, no insured person would qualify for interim benefits, because the state would be covering basic needs. Ms. Z submitted that she was in a Catch-22 position, since before the family courts, her support payments were based upon her receipt of weekly income benefits, just as Dominion was about to terminate those benefits. Unless the family law support proceedings were contemporaneous with this motion, then one forum’s information will be more current than the other’s.

Blatant Disregard of the Schedule

I heard no submissions with respect to any blatant disregard by Dominion of the Schedule’s provisions.

Ruling

Dominion should pay Ms. Z interim weekly income benefits. In my view, Ms. Z has established on a prima facie basis, that is, at first glance, that she is entitled to ongoing weekly income benefits as a result of the accident. This is an interim order. At the hearing Dominion will have an opportunity to cross-examine Ms. Z and both parties will provide further evidence that I will consider to determine whether, after a full hearing, Ms. Z is entitled to ongoing weekly income benefits. Ms. Z has established to my satisfaction that she is in need of interim financial support. I do not agree with Dominion’s contention that Ms. Z should deplete her investments before becoming entitled to interim benefits. At present she is living a very modest existence, while trying to attend university and get on with her life. Contrary to Dominion’s submissions, Ms. Z is in a very good position to provide security for potential repayment of these interim benefits, by virtue of more than $100,000 in exigible assets. She understands that interim benefits are fully repayable. Consequently, when balancing the competing interests of these parties until a final decision in this case is made, hopefully in the early spring of 1999, it is my view that interim weekly benefits should be paid by Dominion.

Production of the Clinical Notes of Dr. Schachter

Dominion sought production of the clinical notes and records of Dr. Judith Schachter, a registered psychologist, who has been treating Ms. Z since late 1995. Dr. Schachter appeared at the motion to testify about her reluctance to produce her clinical notes. A letter explaining her reasons was also filed. Dr. Schachter testified that she felt that providing her notes would damage the relationship of trust she had been establishing with Ms. Z. She agreed that Ms. Z would probably understand on an intellectual level why she had released her notes, if that was my order, but on an emotional level, Dr. Schachter testified she felt Ms. Z would experience this as a severe betrayal by her therapist. Dr. Schachter felt that the solidity of her relationship with Ms. Z was very important at this point in dealing with the ongoing impact of the accident. Dr. Schachter testified that her goal has been to inoculate her patient against stresses and to help strengthen her, but that when under stress, Ms. Z can become suicidal. She testified that she needs to provide a milieu where a person can get better.

Dr. Schachter testified that she has written several reports which outline her professional opinion with respect to Ms. Z's condition. She stated that her clinical notes contain fragments, her personal notes and thoughts, and expressions of feelings, perceptions and values. She did not believe that the raw notes would be more useful than what is contained in her reports.

Ruling

Ms. Z has had significant, life-threatening emotional problems since the accident of January 1993. Dominion is unwilling to accept Dr. Schachter's reports on their face and wants to review the personal notes on which those reports are based. In general, I would support an insurer’s right to review a treating practitioner's notes. When an applicant asserts that she is continuously prevented from working at any job for which she is reasonably suited, as a result of an accident, her pre-accident history is legitimately open to scrutiny so that a fair decision can be reached. When pre-accident matters are disclosed in the notes of a practitioner treating the insured person after the accident, this must be accepted as part of the process. It is never an applicant's prerogative to unilaterally decide what documents are relevant to the issues in dispute at arbitration.

In deciding this issue I am less concerned with the prurient curiosity of those charged with photocopying such notes and with Dr. Schachter's personal view of the immorality of revealing them than I am of the threat of serious harm to the treatment or recovery of Ms. Z. At the same time, I am aware that Dr. Young believes Ms. Z will use suicide threats as a way to manipulate people. Withholding personal information may be a variant manipulative gesture.

On balance, I am satisfied that the probative value of the production of Dr. Schachter's clinical notes of her ongoing treatment of Ms. Z would be outweighed by the potential harm to Ms. Z's treatment or recovery that this production would cause. I do not order that her personal clinical notes be produced. However, if Dominion wishes a qualified psychologist to review the raw data of the testing instruments Dr. Schachter administered to Ms. Z in 1996 (and later, if any exist), then Dr. Schachter should provide copies of that data directly to the psychologist in question.

Expenses:

I heard no submissions with respect to the expenses of the motion. I will deal with the expenses of the motion after the full hearing of the matter.

Order:

1. Dominion shall pay interim weekly income benefits to Ms. Z, in the sum of $434.28, commencing September 25, 1998, until a further order of an arbitrator.

2. Dr. Schachter is not required to deliver a copy of her clinical notes of her treatment of Ms. Z to Dominion. She must produce a copy of the raw data of any testing instrument administered to Ms. Z directly to any psychologist retained by Dominion.

September 25, 1998

K. Julaine Palmer

Arbitrator

Date

Appendix

Hearing:

The motion was heard in London on September 9, 1998, before me, K. Julaine Palmer, Arbitrator.

Present at the Hearing:

Applicant:

Ms. Z

Ms. Z's Representatives:

Barbara Legate Barrister and Solicitor

Annie K. Fraser Law Clerk

Dominion's Representative:

Joan Takahashi Barrister and Solicitor

Dominion’s Officer:

Theresa Less

Witness:

Dr. Judith Schachter, C.Psych.

The report of Dr. Schachter, dated August 31, 1998, labelled exhibit 1, was before me for the purposes of ruling on the question of the production of Dr. Schachter's clinical notes and records.

That report was excluded from evidence on the motion for interim benefits. On the motion for interim benefits only Dr. Schachter's report of May 29, 1997 was before me, marked as exhibit 2 (It also appears as exhibit "G" to the affidavit of Giacomo Negro).

• The other documents before me on the motion for interim benefits were:

Affidavit of Giacomo Negro, with exhibits

January 21, 1998

Affidavit of Ms. Z, with exhibits

May 14, 1998

Applicant's Statement of Fact and Law

May 15, 1998

Supplementary Affidavit of Ms. Z, with exhibits

July 9, 1998

Applicant's Statement of Fact and Law

August 13, 1998

Affidavit of Lynn Shuryn

July 31, 1998

Respondent's Statement of Fact and Law and Submissions

-undated-

Medical Brief of Respondent

rec'd August 14, 1998

Respondent's Submissions in Response to Applicant's Supplementary Statement of Fact and Law

September 3, 1998

• Prehearing letters and various letters from Arbitrators Jones and Renahan and the Registrar in the Commission file.

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2Effective July 1, 1998, the Ontario Insurance Commission became part of the Financial Services Commission of Ontario, pursuant to the Financial Services Commission of Ontario Act, S.O. 1997, c.28.
3. 3Ioannidis and Canadian General Insurance Group, (OIC A97-001551, December 21, 1997)
4. 4Gomez and Pilot Insurance Company, (OIC A-013080, May 10, 1995) and Cripps and AXA Insurance (Canada), ( OIC A-013360, August 8, 1997)
5. 5Malabanan and Canadian General Insurance Company, (OIC A96-00084, July 26, 1996)and Harkness and Economical Mutual Insurance Company, ( OIC A96-001420, December 10, 1996)
6. 6Gomez, supra, Cobby et al. and Non-Marine Underwriters, Members of Lloyd's London, England, ( OIC A-014259, A-014260 and A-014261, October 13, 1995), Malabanan, supra, and Cripps, supra
7. 7Malabanan, supra
8. 8Malabanan, supra, and Cripps, supra
9. 9Malabanan, supra, and Cripps, supra
10. 10Gomez, supra, Cobby et al, supra, and Harkness, supra.
11. 11Osbourne and Allstate Insurance Company of Canada and York Fire & Casualty Insurance Company, (OIC A-009110, November 18, 1994); Lucas and Dominion of Canada General Insurance Company (OIC A-009670, March 23, 1995); Malabanan, supra; Harkness, supra; and Cripps, supra.
12. 12In Sweete and Jevco Insurance Company, ( OIC A96-000614, October 24, 1996) the arbitrator relied, in part, on the insurer's violation of its obligations under section 64 of the Schedule to make an interim order for payment of benefits. In Fortney and Lombard General Insurance Company of Canada, (OIC A97-00553, December 24, 1997) and Coutu and Wawanesa General Insurance Company, (OIC A97-001916, July 8, 1998), the arbitrators relied on an egregious breach of section 64 alone to award interim benefits.
13. 13Tanner and Allstate Insurance Company of Canada, ( OIC A95-000616, May 20, 1998), Simpson and Trafalgar Insurance Company of Canada, ( FSCO A98-000215, July 16, 1998)