Ian A. Catt v. Pafco Insurance Company Limited, 1999 ONFSCDRS 179

Financial Services Commission / Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 179

Appeal P97-00001

OFFICE OF THE DIRECTOR OF ARBITRATIONS

IAN A. CATT

Appellant

and

PAFCO INSURANCE COMPANY LIMITED

Respondent

Before:

Nancy Makepeace, Director's Delegate

Counsel:

Gordon Good (for Mr. Catt)

Eric K. Grossman (for Pafco)

APPEAL ORDER

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

1. Paragraph 1 of the arbitrator's order dated November 21, 1996 is rescinded and the following is substituted:

Mr. Catt is entitled to weekly income benefits from February 2, 1994 to June 19, 1995.

2. Paragraphs 2 and 3 of the arbitrator's order are confirmed.

3. Pafco shall pay Mr. Catt's reasonable appeal expenses.

September 23, 1999

Nancy Makepeace Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND

Mr. Catt injured his left shoulder in an automobile accident on November 11, 1992. He was unable to return to his previous job as an apprentice construction millwright until June 10, 1993 because of neck pain radiating into his shoulders and headaches. Pafco paid him weekly income benefits for that seven month period.

After working for about eight months, Mr. Catt laid off on February 2, 1994. He claims the reason for the lay-off was ongoing shoulder pain. Mr. Catt had arthroscopic surgery on September 1, 1994, and the shoulder was surgically repaired on February 10, 1995. He returned to work on June 19, 1995. Pafco refused benefits for the 16-month period between February 2, 1994 and June 19, 1995.

At the arbitration hearing in October 1996, Pafco's main position was that Mr. Cart's shoulder problems resulted from prior accidents or from work-related injuries. The medical evidence showed that Mr. Catt had an unstable shoulder before the accident because of two labrum tears, a misshapen glenoid and a loose capsule.¹ Mr. Catt dislocated his left shoulder at least twice before the accident. Pafco conceded that if causation were established, Mr. Catt was entitled to benefits between September 1, 1994 and June 19, 1995. Pafco disputed the disability claim for the period from February 2, 1994 to September 1, 1994.

The arbitrator accepted that Mr. Catt's pre-existing shoulder condition became disabling as a result of the accident. While travelling in the passing lane of a divided highway, Mr. Catt was cut off by a vehicle moving into his lane from the right. The left rear of the other vehicle struck Mr. Catt's vehicle on the right front, causing Mr. Catt's vehicle to collide with the concrete median. When Mr. Catt saw the accident coming, he put his right arm around his dog to protect him, and braced his left arm against the steering wheel.

The arbitrator found no evidence to support Pafco's submission that Mr. Catt injured his shoulder at work or at home after the accident. He accepted the evidence of Dr. Sol Goldenberg, a "trauma consultant" who assessed Mr. Catt at Pafco's request. According to the arbitrator, Dr. Goldenberg testified that it was "quite conceivable" that Mr. Catt's shoulder instability was significantly aggravated by this accident.² Dr. Ramunas J.F. Saplys, the orthopaedic surgeon who operated on the shoulder, reported that the shoulder was "likely" aggravated by the accident.³

The remaining issue for the arbitrator was whether Mr. Catt was substantially unable to work as a millwright between February 2, 1994 and September 1, 1994. Because of certain discrepancies in Mr. Catt's evidence, the arbitrator accepted the disability claim only for the period where it was independently corroborated — from July 21, 1994, when Mr. Catt was first seen by Dr. Saplys, to June 19, 1995, when he returned to work after his shoulder repair surgery. The arbitrator dismissed Mr. Catt's claim that he was disabled between February 2, 1994 and July 21, 1994. Mr. Catt appeals from this part of the order. There is no cross-appeal.

II. PRELIMINARY ISSUE

Mr. Catt submitted that the arbitrator's method of marking exhibits made it difficult to determine which documents he considered in reaching his decision. Rather than assigning exhibit numbers to the bound briefs provided by the parties, the arbitrator assigned a combination letter and number code to individual documents found in the briefs as the parties referred to them. Mr. Catt submitted that in the absence of a clear record, I should consider the briefs the parties brought to the arbitration hearing in their entirety. However, by reviewing the transcript, the marked exhibits and the exhibit list, I was able to identify the exhibits with some confidence.⁴

I heard no suggestion that Mr. Catt's counsel objected to the arbitrator's approach. It was obviously aimed at the laudable goals of focusing the hearing, minimizing unnecessary evidence, and promoting faster decision-making. However, this method of marking exhibits makes it difficult for an arbitrator or Director's Delegate to comply with section 20 of the Statutory Powers Procedure Act, which requires a tribunal to compile a record of a proceeding in which a hearing has been held, including "all documentary evidence filed with the tribunal."

At the conclusion of the appeal hearing, I indicated that I would invite further submissions from the parties if I determined that my decision turned on a document that was not admitted at the arbitration hearing. Ultimately, I did not find it necessary to do so.

III. ANALYSIS

As Mr. Catt commenced his arbitration proceeding before November 1, 1996, the appeal is not restricted to questions of law. However, it is well established that it is not my role on appeal to second-guess the decision of the arbitrator, who had an opportunity to observe the witnesses and assess all the evidence. Considerable deference will be given to an arbitrator's factual findings unless the arbitrator made a serious error, disregarded important evidence, considered irrelevant factors, or reached a conclusion not supportable on the evidence.

The issue in this appeal is limited: did the arbitrator err in finding that Mr. Catt was not disabled between February 2, 1994 and July 21, 1994? The arbitrator gave his reasons for dismissing the claim for this period at pages 12-14 of his decision. His conclusion rested on five key findings:

• the evidence left it unclear where Mr. Catt was working at the time of his lay-off, what were his essential tasks and why he asked to be laid off;

• Mr. Catt applied for Unemployment Insurance ("UI") regular benefits, certifying that he was able to work, during the time he now claims disability benefits from Pafco;

• a February 1994 note from Mr. Catt's family doctor excusing him from a welding course, focused on his flexion-extension (neck) injury rather than shoulder pain;

• Dr. Galea, a sports medicine specialist who treated Mr. Catt, did not know what Mr. Catt's job was when he reported on June 13, 1994 that he was disabled; and

• Dr. Saplys' opinion that Mr. Catt was disabled as of July 21, 1994 could not apply to any period before Mr. Catt was seen by the doctor.

A. Mr. Catt's work at the time of his lay-off in February 1994

Mr. Catt did not work exclusively for a single employer, but was assigned to various millwright jobs by his union. The records of his work assignments before and after the accident were admitted into evidence. Early in his examination in chief, he testified that he was unable to work after February 2, 1994 because "[B]y that time the last job that I'd been working at Dielco Industries at Kellogg's was pulling lots of chain falls and working overhead, which I'd been doing since before the accident, and my arm just continued to get worse as the job went on."⁵Union records showed that after working 92 hours at Dielco in January, Mr. Catt worked for 36 hours that month at Nicholls-Radtke, and he was working for Nicholls-Radtke when he was laid off. Based on this discrepancy, the arbitrator concluded that it was "not clear what work Mr. Catt asked to be laid off from." This was one of the factors he relied on in rejecting Mr. Catt's testimony that he laid off because of his shoulder problems. Reading the decision as a whole, this discrepancy may have affected the arbitrator's assessment of Mr. Catt's credibility.

The union records were led into evidence by Mr. Catt, and his counsel took him through them in examination-in-chief. Mr. Catt testified about his work at Nicholls-Radtke, and explained his tasks as "medium heavy to light duties."⁶ There was no contrary evidence. The trade description and the covering letter prepared by the local union's business manager confirm the diversity of tasks and physical demands.⁷ Pafco's counsel did not cross-examine Mr. Catt about where he was working or what he was doing at the time of the lay-off. The arbitrator accepted Mr. Catt's evidence about the varied nature of a millwright's work.

In my view, it was not open to the arbitrator to find that it was unclear where Mr. Catt was working at the time of his lay-off on February 2, 1994: he was working as a construction millwright at Nicholls Radtke. Though Mr. Catt was not asked to give details about the physical demands of that particular job, his testimony that its physical demands were "medium heavy to light" was uncontroverted and consistent with all the other evidence about a millwright's job. He explained that his shoulder worsened while he worked at Kellogg's because the job involved a lot of overhead work. His testimony suggested that the job at Nicholls Radtke was less demanding.

The delay of some 15 months between the accident and the lay-off, along with Mr. Catt's evidence about his heavy work at Kellogg's, lends support to Pafco's submission that Mr. Catt's pre-accident shoulder instability was aggravated by the job he was working on in late 1991 and early 1992. However, the arbitrator concluded, "although the work performed at Kellogg's was strenuous and painful, I heard no evidence that it aggravated or contributed to the shoulder instability."⁸ As there was no evidence of any intervening event, the arbitrator accepted the opinions of Dr. Goldenberg and Dr. Saplys that the collision likely aggravated the pre-existing instability. Pafco did not cross-appeal with respect to the causation issue and there is little evidence that would support such an appeal.

B. Unemployment insurance

Mr. Catt testified that he asked to be laid off on February 2, 1994 on Dr. Washburn's advice. However, he asked his employer to report the lay-off as an "ordinary" lay-off unrelated to disability.⁹ Mr. Catt testified that his apprenticeship programme required him to take three eight-week courses over the course of the programme. The courses were offered by George Brown College, but the millwrights' union decided when any particular apprentice would take the course. In the first or second week of February 1994, shortly after his lay-off, the union advised Mr. Catt that he was enrolled in his third course beginning February 28, 1994 and ending on April 22, 1994. Pafco did not take issue with Mr. Catt's evidence that he was entitled to claim regular UI benefits while taking the course and for two weeks afterwards. Mr. Catt admitted he continued to receive regular UI benefits to which he was not entitled for about four months after finishing the course.

Mr. Catt admitted that he represented himself as able to work by applying for regular Unemployment Insurance benefits after his lay-off. He gave several explanations — that he needed the money, UIC disability benefits would not have paid him much less than regular benefits, and his file was already open because of his apprenticeship. The arbitrator dismissed these explanations, and found that "Mr. Catt misrepresented his ability to work in order to obtain other insurance money." This finding was an important factor in the arbitrator's conclusion that Mr. Catt was not disabled when he asked to be laid off.

It was not open to the arbitrator to find both that Mr. Catt was able to work and that he misrepresented his status to UI. However, it was open to the arbitrator to consider Mr. Catt's contemporaneous representation that he was able to work as probative evidence of his functional level at that time. Pafco submitted on appeal that it would be "incongruous" to find that Mr. Catt was disabled when he was at school. Mr. Catt argued that Pafco should not be allowed to raise this issue now, because it was neither argued at the arbitration hearing nor addressed in the decision. Mr. Catt's ability to complete the course was not the issue in dispute, as his essential tasks as a student would not likely involve significant over-shoulder-level work. In any event, Mr. Catt's school records show that his marks declined precipitously in the third session (February 23 - April 22, 1994) relative to his first two sessions (January 7 - March 1, 1991 and January 4 - February 26, 1993). He was exempted from his welding course during the third session because he was unable to wear a welding helmet due to neck pain. Dr. Washburn wrote a note in support of his exemption request.

Pafco suggests that Mr. Catt requested the lay-off to attend the course. However, Mr. Catt's testimony that he laid off on Dr. Washburn's advice after x-rays were done on February 2, 1994 is corroborated by the x-ray report prepared for Dr. Washburn that day. Mr. Catt testified that he found out about the course in mid-February, a couple weeks after laying off. Pafco's counsel did not challenge this in cross-examination and the arbitrator appears to have accepted it. Nothing in the evidence persuades me to re-open this issue.

C. Medical Evidence

On February 25, 1994, Dr. Washburn wrote a note saying that Mr. Catt should not take a scheduled welding course because of his neck problems. The arbitrator disregarded it because it focussed on Mr. Catt's neck injury and made no reference to his shoulder injury. The arbitrator found that Mr. Catt had recovered from his neck injury. Mr. Catt does not dispute this finding.

However, eight days earlier, Dr. Washburn prepared a form report stating that Mr. Catt was disabled by a shoulder injury, and he did not know ("sais pas") when he would be able to return to work.¹⁰ Under "investigations/test results," he indicated that x-rays showed Mr. Catt's left shoulder was "shot to hell." He prepared another note on May 5, 1994, saying that Mr. Catt would be off work indefinitely because of his shoulder injury. Whatever the explanation for the earlier note, the evidence considered as a whole shows that Mr. Catt's shoulder was becoming the focus of medical concern in early 1994.

Dr. Washburn referred Mr. Catt to Dr. J.J. Murnaghan, an orthopaedic surgeon, at the end of February 1994.¹¹ Mr. Catt told Dr. Murnaghan he had "continuous pain in the left shoulder over the tip of the shoulder." Dr. Murnaghan diagnosed "a developmental defect . . . which may cause him mechanical problems with the muscles around his rotator cuff from time to time. This may be an impingement of the supraspinatous or infraspinatous tendons which gives him this sudden pain which he describes as a nerve jumping in his arm. This limitation may pose difficulties to a job which requires a great amount of overhead work. He functions very well at chest height or bench height or working on the floor." Dr. Murnaghan referred Mr. Catt for more physiotherapy. Mr. Catt was unhappy with this recommendation because his shoulder pain was worse with activity. He spoke to his sister, who recommended Dr. Anthony Galea, a sports medicine specialist.

Mr. Catt began seeing Dr. Galea in late March 1994. Dr. Galea referred him for physiotherapy at his clinic, the Institute of Sports Medicine and Human Performance, with a diagnosis of whiplash and rotator cuff tendonitis. Mr. Catt found that physiotherapy aggravated his shoulder pain. On May 12, 1994, Dr. Galea injected the shoulder with anaesthetic and steroids. This helped for three or four days. On June 13, 1994, Dr. Galea wrote a note stating that Mr. Catt "is unable to work due to an injury to his left shoulder." Dr. Galea referred Mr. Catt to Dr. Saplys and advised him to stay off work in the meantime.

The arbitrator "placed little weight" on Dr. Galea's opinion on the basis that he "received no evidence that Dr. Galea understood the nature of Mr. Catt's work." However, the clinic's intake report correctly describes Mr. Catt's occupation as "construction/milling." Pafco's counsel did not cross-examine Mr. Catt on this point.¹²

Pafco sent Mr. Catt to Dr. Goldenberg for another assessment in March 1994.¹³ Dr. Goldenberg concluded that Mr. Catt could work as a construction millwright. He did not accept the diagnosis of rotator cuff tendonitis. However, on examination, he did note that Mr. Catt had full range of motion in his upper extremities except in his left shoulder. He also noted atrophy of the deltoid muscle and supraspinatus muscle. He accepted that Mr. Catt's symptoms were genuine. He felt, however, that Mr. Catt's pre-accident shoulder instability "might have some bearing on the problem."

Mr. Catt saw Dr. Saplys on July 21, 1994. Dr. Saplys observed decreased abduction and forward elevation because of pain, tenderness over the anterior acromion, marked supraspinatous wasting and weakness, Grade 3 of 5, and a positive impingement sign. He diagnosed "a Stage 2 impingement syndrome and possible rotator cuff tear as well." In a subsequent report, Dr. Saplys said Mr. Catt was disabled when he first assessed him on July 21, 1994. However, he felt he could not give an opinion about whether Mr. Catt was disabled previously.

On September 1, 1994, Dr. Saplys conducted a left shoulder examination and arthroscopy. It showed anterior instability, an anterior glenoid labrum tear and extension of the glenoid inferiorly with fibrocartilaginous coverage. The latter was felt to be "most consistent" with Mr. Catt's history of prior injuries. Dr. Saplys opined that the accident likely aggravated the underlying instability to the point where it became disabling.

When Mr. Catt returned on October 19, 1994, complaining of persistent pain with external rotation, Dr. Saplys recommended an anterior repair of the shoulder to treat the instability and pain. He expected that the surgery would significantly reduce the pain, though Mr. Catt would continue to have some discomfort because of early degenerative changes. Dr. Saplys reported that Mr. Catt was "significantly disabled" at the time of the report, "particularly if [the job] requires heavy lifting or moving of his shoulder or any other type of reaching movements. Reaching back also would cause him left shoulder discomfort."

The surgical repair was performed on February 10, 1995. On December 12, 1995, Dr. Saplys reported that Mr. Catt's subjective pain complaints and mobility had improved significantly, though he continued to have mild pain and would probably continue to do so.

Conclusion

The arbitrator allowed Mr. Catt's claim for benefits from July 21, 1994 to June 19, 1995 on the basis of Dr. Saplys' opinion. In refusing benefits from February 2 to July 21, 1994, he especially relied on Dr. Saplys' inability to comment on that period. This finding does not sit well with the arbitrator's finding that Mr. Catt suffered an objective shoulder injury (aggravation of pre-existing instability) as a result of the accident, and did not sustain any further injury afterwards. The arbitrator accepted that the injury was disabling by July 21, 1994, when Mr. Catt first saw Dr. Saplys. He did not rely on Dr. Goldenberg's opinion in March 1994 that Mr. Catt could return to work. In fact, Dr. Goldenberg accepted Mr. Catt's symptoms as genuine and observed objective signs of soft tissue injury (muscle wasting and reduced range of motion). In the absence of an intervening event, it is difficult to understand why a shoulder injury that was disabling on July 21 would not also have been disabling five months earlier. In fact, the medical reports of Dr. Washburn, Dr. Galea and Dr. Murnaghan between February and July 1994 satisfy me that it was.

Section 283(5) of the Act allows me to substitute my order for that of the arbitrator. I find it appropriate to do so in this case, given the limited amount of benefits in issue, the confusion with respect to the record, and the fact that I have a transcript of the hearing available to me.

IV. EXPENSES

Mr. Catt is entitled to his reasonable appeal expenses. I may be spoken to if the parties are unable to agree on the amount.

September 23, 1999

Nancy Makepeace Director’s Delegate

Date

Footnotes

1. 1The arbitrator explained these terms at p. 6 of his decision. The glenoid is the shoulder socket. The labrum is fibro-cartilage tissue which extends from the bone and makes the socket slightly deeper. The capsule is the dense fibrous tissue which surrounds the joint and holds it together in the capsule.
2. 2I do not have the transcript of Dr. Goldenberg's testimony, but Pafco does not dispute the arbitrator's account of it.
3. 3Exhibit AM - 3, p. 3: Dr. Saplys' report of December 12, 1994.
4. 4There were problems with all three sources. I was not provided with the transcript of the second day of hearing, when Pafco presented its case. Also, there were a number of off-the-record discussions, some of which appear to have dealt with whether a document should be entered as an exhibit. Occasionally, the arbitrator and counsel referred to a document that was included in the briefs without marking it as an exhibit. An exhibit list was prepared, but not appended to the decision. In any event, it is incomplete relative to the transcript. The arbitrator marked most but not all of the admitted documents with an exhibit number. Some excluded documents were removed from the briefs, but not all of the remaining documents are marked as exhibits. It is not always clear whether the exhibit is a single page, a single report, or the entire contents of a tab. Ultimately, I relied on the transcript.
5. 5Transcript, pp. 7-8.
6. 6Transcript, pp. 46-7.
7. 7Arbitration Exhibit AE-1, pp. 33-38.
8. 8Arbitration decision, p. 11.
9. 9The Record of Employment (separation slip) was not entered as evidence.
10. 10Dr. Washburn's form report, dated February 17, 1994, appears not to have been marked as an exhibit. However, it was put to Mr. Catt in examination in chief (transcript pp. 49-50). On appeal, Pafco's counsel agreed that any document referred to in the transcript could be considered as part of the record, unless excluded. The transcript indicates no reason why this report was not marked as an exhibit. Accordingly, I consider it part of the record.
11. 11Dr. Murnaghan prepared another report on October 18, 1996. This report seems to have been excluded from the evidence because of late service, and accordingly I do not rely on it.
12. 12Dr. Galea's March 23, 1994 clinical note includes the notation "builds factories, heavy lifting." This is found at p. 7 of Tab 9 of the Applicant's Medical Brief. The note was not removed from the brief, but I am unable to find any reference to it on the arbitrator's exhibit list or in the transcript. Moreover, as pp. 2, 3 and 8 of Dr. Galea's records were entered as Exhibit AM - 9, pp. 2, 3 and 8, it seems very likely the arbitrator did not consider page 7 as an exhibit. This note should have been admitted into evidence. Ultimately, I did not find it necessary to rely on it.
13. 13Dr. Goldenberg first saw Mr. Catt on March 16, 1993.