Neutral Citation: 1999 ONFSCDRS 86

FSCO A96–000247

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

AMERICO ALVES

Applicant

and

COMMERCIAL UNION ASSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Stewart McMahon

Heard:

March 17, 18, 19, 26, April 21, June 2, 1997, and December 7 and 9, 1998, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Antonio F. Azevedo for Mr. Alves

Brian Atherton for Commercial Union Assurance Company

Issues:

The Applicant, Americo Alves, was involved in a motor vehicle accident on December 30, 1994 (the "first accident"). He applied for and received income replacement and supplementary medical benefits (that included chiropractic treatments) from Commercial Union Assurance Company ("Commercial Union"), payable under the Schedule.¹ Commercial Union terminated weekly income replacement benefits on May 5, 1995, and funding for chiropractic treatments in March 1996. The parties were unable to resolve their disputes through mediation, and Mr. Alves applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. While still receiving benefits arising from the first accident, Mr. Alves was involved in a second accident on April 5, 1995 (the "second accident"). Mr. Alves did not believe that this accident caused him any injury, and initially he did not file an application for benefits. Just prior to the commencement of the arbitration hearing relating to the first accident, the Insurer advised it would take the position that any disability proven by the Applicant was attributable to the second accident, rather than the first. During the first few days of the hearing, counsel for the Insurer attempted to elicit evidence designed to establish this defence. In response, counsel for Mr. Alves filed a second application. Over the objection of Insurer's counsel, I adjourned the matter so that the applications with respect to both accidents could be considered together.

The issues in this hearing are:

1. Is Mr. Alves entitled to weekly income replacement benefits for any period beyond May 5, 1995?

2. Is Mr. Alves entitled to supplementary medical benefits of $3,148.40 representing outstanding chiropractic accounts?

3. Is Mr. Alves entitled to interest on any amounts owing?

4. Is Mr. Alves entitled to his expenses incurred in this arbitration proceeding?

Result:

1. Mr. Alves' claim for weekly income replacement benefits is dismissed.

2. Mr. Alves' claim for supplemental medical expenses is dismissed.

3. The issue of expenses may now be spoken to.

PRELIMINARY ISSUE:

At the commencement of the resumption, the Insurer raised two preliminary defences related to the application for benefits arising from the second accident. First; the application did not explicitly request payment of any benefit, and hence there was nothing to arbitrate. Second; Mr. Alves had failed, without adequate explanation, to notify the Insurer of a potential claim within 30 days, contrary to section 59 of the Schedule. I dismissed these defences, giving oral reasons during the course of the hearing.

In brief, I rejected the first preliminary defence on the grounds that, despite the poorly prepared application, it was clear to the Insurer that the intent of the application was to demand payment of ongoing income replacement benefits, and reimbursement of the outstanding chiropractic accounts.

I rejected the second defence on the ground that the late notice was invited by the Insurer when it argued that any disability was more likely attributable to the second rather than the first accident. I balanced the prejudice to the Insurer against the prejudice to the Applicant and excused the late notice.

An unedited transcript of my oral reasons is appended to this decision as Appendix A.

EVIDENCE AND ANALYSIS:

Mr. Alves was 57 at the time of the first accident. He was born in Portugal and immigrated to Canada when he was 35. He has limited formal education and only a rudimentary knowledge of English. Mr. Alves has worked as a carpenter all of his life.

In March 1993, approximately a year and a half before the first motor vehicle accident, Mr. Alves fell in a work-related accident and injured his low back. Mr. Alves was forced to stop working because of this injury.

A few months later, in June 1993, while still off work because of his back complaints, Mr. Alves fell a second time. On this occasion, Mr. Alves strained the rotator cuff in his left shoulder and developed chronic tendonitis.

Mr. Alves contends that he was back at his regular duties by the end of the year. The Insurer contends that he has never returned to his regular duties. Ascertaining the extent of Mr. Alves pre-existing physical limitations and defining what work he was capable of, are crucial elements of these reasons.

Pre-accident Condition and Activities:

Mr. Alves has been in business for himself the last 15 years, acting as a subcontractor on residential projects and performing home renovations. Without enumerating all of the tasks listed by Mr. Alves, suffice it to say that his trade involves demanding physical work that includes lifting, carrying and holding heavy and awkward objects, often while simultaneously doing other tasks such as hammering. It requires the ability to work in a stooped or kneeling position and at other times with the arms extended overhead. Mr. Alves testified that in the year before the accident he was employed full time as a carpenter, performing all of the usual tasks associated with that trade.

Mr. Alves refused to concede obvious physical limitations that have plagued him since his falls in early 1993. He maintained in the face of his own physicians' notes to the contrary, that these limitations did not prevent him from working at any time in 1994. In light of Mr. Alves' refusal to concede his obvious limitations, I cannot rely upon his evidence concerning either his condition, or what work he was engaged in during the year or so pre-dating the first accident.

Mr. Alves also relied upon the evidence of his two primary physicians; Dr. Rui Martins, his family doctor, and Dr. George Vincent, his treating orthopaedic surgeon. Dr. Martins tended to make comments about Mr. Alves' condition that did not always accord with his own notes. Nor did he ever specifically enquire into the type and amount of work that Mr. Alves was engaged in throughout 1994. Dr. Vincent concluded that Mr. Alves' shoulder was healing and that he had returned to work, based principally on the fact that he did not see Mr. Alves in 1994. However, Dr. Vincent's assumptions do not stand up against the other available evidence. I place little weight on the comments offered on this issue by either doctor.

The amount of the weekly benefit was not at issue, and no financial information was filed that might have assisted me in determining how much or what type of work Mr. Alves had done in the year or so before the accident. Only one co-worker testified. He assisted Mr. Alves with a home renovation in the summer of 1994. Amongst other things, he and Mr. Alves broke up and shovelled out an old cement basement floor. He stated that Mr. Alves worked long hard hours, and did not appear impaired. Unfortunately he worked with Mr. Alves for only three weeks, and consequently his evidence is of limited assistance.

In the circumstances I am left to piece the matter together as best I can, based primarily upon Dr. Martins' and Dr. Vincent's clinical notes and records, and reports to third parties such as the Worker's Compensation Board (WCB).

Mr. Alves applied for, and received WCB benefits as a result of his low back injury in the spring of 1993. He was assessed at the behest of the Board in August 1993. The assessors concluded that his low back problem was no longer disabling, but that his shoulder injury; which was deemed non compensable, rendered him "unable to return to this [carpentry] work except perhaps for minimal bench work." Mr. Alves' benefits were terminated shortly thereafter.

In October 1993, Dr. Vincent wrote to Dr. Martins suggesting a return to modified work, as he did not believe that Mr. Alves could resume his previous employment. Dr. Martins followed this up with a letter to the WCB suggesting a return to modified duties involving no repetitive lifting or bending and no overhead work. He testified that the bending and lifting restriction related to the low back trouble, and the overhead work to the shoulder tendonitis.

A clinical note in Dr. Martins' file, and a letter to the WCB suggest that Mr. Alves tried to return to modified duties in November but notwithstanding that he left most of the heavy lifting to his assistant, he managed to last only two days before having to stop.

A note approximately five months later, in late April 1994, states that Mr. Alves stopped work a month earlier because of increased shoulder pain. I infer that at some point between mid-November 1993, and mid-March 1994, Mr. Alves returned to work. In light of the doctors' earlier opinions to the WCB, and the failed attempt to return to work in November, I presume that Mr. Alves must have been doing modified work, relying upon employees for the heavier tasks. This note is followed by one in early May, again indicating that Mr. Alves is unable to work with his current limitations. Reference is made to both low back pain and shoulder pain.

It would appear that the second attempt to return to work as a subcontractor was more successful than the first, but at most, Mr. Alves managed to remain at work for a few months before he was forced to stop because of a combination of low back and shoulder pain.

The next note is in early November 1994, approximately six months later. It refers to a complaint of low back pain, and states that Mr. Alves stops work after two or three hours to lie down and take Tylenol #2. Although Dr. Martins testified that after lying down for a while Mr. Alves would return to work, the clinical note does not refer to returning to work after lying down. The additional comment is very significant, and no explanation was provided for why there was no reference to it in the note. I prefer the note which was made contemporaneously with the discussion.

Even more importantly, Dr. Martins testified that he assumed that over the summer Mr. Alves had returned to work as a subcontractor. In point of fact he did not. In April or May, Mr. Alves had purchased a house, intending to renovate and sell it.

Mr. Alves denied any suggestion that he had embarked on the renovation project because it allowed him to work at his own pace, and to take time off as needed. Mr. Alves answer does not accord with common sense. Mr. Alves had purchased homes in the past that he renovated on his own time while his family lived in them. He later sold them and used the proceeds to finance the purchase of a new house. In light of his difficulties coping with subcontracting work, it is inconceivable that Mr. Alves would have even considered trying to hold down a subcontracting job and to renovate a house at the same time. I conclude that he purchased the house as an alternative to working as a sub-contractor. Renovating a house he himself owns, obviously offers considerably more flexibility than working as a sub-contractor, or even renovating a house owned by someone else. In the absence of any plausible explanation offered by Mr. Alves, I conclude that Mr. Alves embarked on this project because he was unable to cope, on a sustained basis, with the demands of his usual work.

Mr. Alves called one employee, who as noted earlier worked for him for three weeks in the summer. It would appear from this witness's evidence that Mr. Alves kept up a sustained effort for at least three weeks over the course of the summer. Mr. Alves employed at least one other worker who was not called. Mr. Alves himself offered only descriptions of the type of work involved, but did not offer any breakdown of the time spent on various tasks, or even his daily routine.

Mr. Alves told Dr. Harold Becker, who conducted a DAC report that he had intended to finish the renovations by the early fall, but that due to unavoidable delays the work was unfinished at the time the first accident happened in late December. Given the sparse evidence concerning the renovation project, I infer that the delays were attributable to Mr. Alves' physical limitations. This would appear to be consistent with Dr. Martins' clinical note in November, which as I noted earlier indicated that Mr. Alves had to lie down after working for a couple of hours. I conclude that over the course of the summer the physical demands of the project took their toll on Mr. Alves to the point where he was only able to work on the project part time.

Finally I note that only three days before the first accident, Mr. Alves' low back pain was so intense that he had made an appointment to see Dr. Martins. He told the doctor that he had slept on the floor as he was unable to get out of bed. Obviously he was not working at all while his back pain was this intense. On a number of occasions, both before and after the motor vehicle accidents, Mr. Alves low back pain has been so severe that it has lead to syncopal episodes, during which Mr. Alves momentarily loses consciousness.

The back pain, which is mechanical in nature, and the tendonitis, are by their nature, aggravated by activity and relieved by rest. Neither condition prevents use of the back or the shoulder, but continued use increases the pain to the point where the activity becomes intolerable. I am convinced that since Mr. Alves' injuries in the spring of 1993, he has remained incapable of sustained work. At best Mr. Alves was capable of working for a few months, before the pain in either his back or shoulder severely limited his ability to continue. Mr. Alves had abandoned his two attempts to return to subcontracting work. The home renovation project cannot be equated with his usual work, and in any event the evidence suggests that Mr. Alves was unable to work on the project full time.

Based upon a review of the available evidence relating to Mr. Alves condition and activities since his falls in the spring of 1993, I am not satisfied that Mr. Alves ever succeeded in returning to full time employment.

Finally there is nothing in the evidence to suggest to me that Mr. Alves' troubles were resolving and but for the accident he would soon have been able to return to full time work.

I now consider Mr. Alves' condition post-accident. There are two elements to this examination. The Insurer terminated benefits in the spring of 1995, and I must determine whether Mr. Alves remained disabled beyond the cut off date. The second question concerns the role of the accident in causing or perpetuating Mr. Alves' ongoing complaints.

Post-Accident condition:

The first accident occurred on December 30, 1994. Mr. Alves was the operator of a vehicle struck on the passengers side during a mid-intersection collision. Mr. Alves contends that his right shoulder struck the driver's door.

Mr. Alves did not experience any immediate pain, and did not go to the hospital, but he did see Dr. Martins, his family physician later in the day. At that time, he complained of pain in his neck and shoulder. On examination, his left neck and trapezius were tender, but he had full range of motion in his neck. The doctor's clinical note refers to neck and shoulder strain. There is no indication in the note of bruising, swelling or tenderness in the shoulder.

The second accident occurred on April 5, 1995, approximately four months after the first accident. It also occurred in an intersection. Notably, this time Mr. Alves' car was struck on the drivers side. Mr. Alves testified that he saw the collision coming and braced himself by gripping the steering wheel. He stated that he did not strike his shoulder, nor any other portion of his body against the interior of the vehicle. He did not believe that he was injured and did not seek medical attention.

Mr. Alves saw Dr. Martins approximately a week after the second accident, at which time he complained of pain in his neck, shoulder, low back and knees. There is no notation of a second accident. The doctor's findings on examination are a mirror image of an examination conducted approximately a week before the second accident. By the time of the hearing Dr. Martins was aware of the second accident, but I do not know when he learned of it.

Shortly before the second accident, Dr. Martins had asked Dr. Vincent, an orthopaedic surgeon, to review Mr. Alves ongoing complaints. The appointment took place a month or so after the second accident. Mr. Alves did not mention the second accident to Dr. Vincent. Dr. Vincent arranged for x-rays which showed significant subluxation in Mr. Alves cervical spine. However, he noted only minimal physical symptoms in his neck, and wondered if the problem was an old one. Later tests confirmed that the bony process was intact and the most likely cause of the subluxation was a stretching of the ligaments. Later testing showed evidence of arthritis in the same area of Mr. Alves' spine.

In the ensuing months, Mr. Alves complained of continued pain in his low back and shoulder. He also consistently complained of neck pain and headaches, and more recently of depression. In addition to these usual symptoms, Mr. Alves has also complained at various times of left arm numbness and elbow pain, right heel and foot pain, knee pain, and kidney stones.

The Insurer argued that the neck complaints and associated headaches are not terribly significant and that they were blown out of proportion during the hearing, because of the difficulty attributing the shoulder complaints to the accidents. I do not agree. A review of Dr. Martins' notes reveals that Mr. Alves has consistently complained to his family doctor of neck pain and headaches. He has submitted to regular treatment for these conditions. It is true that there are no significant limitations in the range of motion associated with the neck complaints, but I am satisfied that the neck condition and associated headaches have been a constant source of pain.

Mr. Alves has two and probably three distinct problems related to his left shoulder. One; he has chronic tendonitis in the rotator cuff. Two; he has arthritis in the acromioclavicular joint in his shoulder. Three; some of the pain in his shoulder is likely referred pain associated with his neck troubles.

Mr. Alves' complaints have been treated by extensive physiotherapy and chiropractic treatments. Initially the treatments were five days a week. As of the hearing Mr. Alves was receiving treatments twice per week. He has also received cortisone injections in his shoulder, which brought only transient relief. In July 1996, Mr. Alves underwent an acromioplasty and resection of the lateral end of his clavicle. The operation was designed to alleviate the pain associated with the tendonitis in the rotator cuff. Dr. Vincent explained that it does not usually afford the patient much increased range of motion, but the hope is it will provide some pain relief and allow for more sustained activity. The surgery did not address the complaints related to the arthritis or the referred pain from the neck. Dr. Martins' notes in the year and a half following the surgery suggest that Mr. Alves does have some increased mobility in the shoulder, but that it continues to be painful and is sensitive to changes in weather.

Dr. Martins' notes continue to record complaints of persistent neck pain and headaches. The notes also reveal that the low back pain is a perennial problem, but that by 1996 it appears to be more episodic, than constant. Early in 1998, Dr. Martins became concerned about signs of depression that he related to Mr. Alves inability to work. He referred Mr. Alves to a chronic pain program. Mr. Alves has not returned to work.

Both Dr. Martins and Dr. Vincent support Mr. Alves' contention that he is incapable of returning to the carpentry trade. Mr. Alves was awarded a C.P.P. disability pension in late 1998.

The Insurer relies upon two medical opinions in support of its contention that Mr. Alves is not disabled. The first is the opinion of Dr. Lyndon F. Mascarenhas who conducted an Insurer Medical Examination. The second is the opinion of Dr. Becker who prepared a Designated Assessment Centre report.

Dr. Mascarenhas examined Mr. Alves in late March 1995, approximately three months after the first accident and shortly before the second accident. Dr. Mascarenhas noted only minimal symptoms, and while he acknowledged that Mr. Alves would likely remain symptomatic for a while, he opined that Mr. Alves was fit to return to work. He suggested a graduated return over a four week period.

Dr. Harold Becker examined Mr. Alves in November 1995. Initially Dr. Becker concluded that Mr. Alves was disabled. Dr. Becker noted considerably more restriction in the use of the shoulder than did Dr. Mascarenhas, and pain associated with both passive and active movement. He suggested that Mr. Alves be referred back to his orthopaedic surgeon and begin an aggressive exercise program.

After completing his report, Dr. Becker reviewed surveillance video tapes that depicted Mr. Alves early in 1995, using a long handled scraper to break up and push aside ice on his driveway. The tape also showed Mr. Alves in the summer of 1995 cutting the grass, and gesturing with his left arm held overhead. Dr. Becker revised his earlier opinion, reporting that he was "impressed at [sic] Mr. Alves as a man who appeared to be moving normally, fluidly and without any obvious difficulties."

The surveillance video does suggest that Mr. Alves had more mobility in his shoulder than he demonstrated on examination by Dr. Becker. However, in the final analysis it does little to assist in determining whether or not Mr. Alves is disabled. As noted above, the tendonitis does not reduce mobility in the shoulder per se. It tends to limit the use of the shoulder by virtue of the fact that repeated use aggravates the pain associated with movement. Of the two principle portions of the video relied upon, one is nothing more than a gesture with a raised arm that lasts only a couple of seconds. The other involves strenuous activity sustained over 15 minutes or so. Mr. Alves led a physically active life, and it is not surprising that he continues to want to contribute by shovelling the driveway or cutting the grass. Mr. Alves' efforts to work after his injuries in the spring of 1993, clearly indicate that he is capable of physical work for short periods of time. The activity depicted on the tape is consistent with this finding. The real question is whether he can maintain that effort day in and day out, such that he could return to remunerative employment. The limited activity shown on the video tapes is not necessarily inconsistent with Mr. Alves' claim that he remains disabled.

Mr. Alves' complaints have been consistent and unrelenting. The shoulder surgery alone, speaks to the severity of the shoulder complaints.

Mr. Alves' long work history and more importantly his efforts to return to work after the falls in 1993, and the depressive symptoms noted by his family doctor (which he attributed to his inability to return to work), suggest to me that Mr. Alves would have returned to work long ago if he were capable of doing so. I am satisfied that Mr. Alves remained unable to return to full time remunerative work as a carpenter.

I turn now to the role of the accidents in causing or aggravating Mr. Alves' complaints.

No attempt was made to link the ongoing low back complaints to the accident.

There is no indication of neck complaints or headaches before the first accident. I am satisfied that although there is evidence of arthritic changes in Mr. Alves' neck, the onset of these symptoms is attributable to the accident.

The link between the ongoing shoulder complaints and the accidents is hotly contested. Mr. Alves argued that the first accident made a material contribution to his shoulder complaints. Mr. Alves relied upon the opinions of Dr. Martins and Dr. Vincent. Both doctors suggested that the shoulder injury was resolving. They agreed that in light of an increase in the symptoms after the first accident, the most logical conclusion was that the accident played a significant role in aggravating the problem.

The doctors' present belief is in stark contrast to the opinions they offered to the WCB in late 1993. Prognosticating the future progression or remission of a condition is far from an exact science. The doctors are entitled to revisit their earlier opinions, but the basis for the change must be examined carefully. As noted above, I have concluded that each doctor significantly overestimated the amount and type of work that Mr. Alves was engaged in during 1993. More importantly, Dr. Martins' own notes suggest that the problem had not resolved. In late April 1994 there is a notation that he had stopped work because of shoulder pain. This notation is repeated in May. In addition Mr. Alves' complaints tend to vary from visit to visit depending upon what was bothering him the most at any given time. On some occasions it is the back on others the shoulder, and on others the foot or knee. I do not think that very much can be drawn from the absence of any complaint over a few visits. When the notes are examined in the context of what we now know about Mr. Alves' troubles working during 1994, I do not believe that there is reliable evidence that his shoulder troubles were resolving.

In trying to decide whether the accidents played a significant part in aggravating the shoulder symptoms, I also look at the nature of the collisions. With respect to the first collision, contrary to the understanding of Dr. Martins, Mr. Alves' vehicle was struck on the passengers side, not the drivers side. The initial force of the collision would have thrown Mr. Alves away from, not toward the door. The collision between the door and Mr. Alves' shoulder would have been as a result of a rebounding effect. I have no reason to doubt Mr. Alves' testimony that he struck the door, but I note that the impact was insufficient to cause any immediate pain, and there was no sign of bruising when he saw the doctor later that day, and on examination he was capable of a full range of motion in the shoulder. The pain that Mr. Alves felt initially in the upper shoulder is as likely attributable to the referred pain from the neck injury as it is to any exacerbation of the tendonitis which would be more consistent with a forceful blow to the shoulder or wrenching of the musculature.

Nor is there any reliable evidence that the arthritis in the acromioclavicular joint was caused or aggravated by the accident. The most the Applicant's doctors could offer was that trauma to the shoulder might exacerbate an arthritic condition.

On balance, I am not convinced that the Applicant has proven, on a balance of probabilities, that the first accident significantly exacerbated the shoulder injury.

As noted at the commencement of these reasons, the Insurer argued that if the shoulder troubles are attributable to trauma, it is more likely that they ought to be attributed to the second rather than the first accident. In light of my earlier findings this point is moot, but for completeness sake I offer the following brief comments.

A blow from the drivers side, such as occurred in the second accident, is more consistent with an exacerbation of the tendonitis, however in light of the balance of the evidence, I reject the Insurer's thesis. To my mind the two overwhelming facts that belie the Insurer's argument, are the absence of any complaints at the time of the accident, and even more importantly, the absence of any significant signs of trauma to the shoulder at the time Mr. Alves was examined by Dr. Vincent shortly after the accident.

In my view the only effect of the accidents was to superimpose upon the tendonitis and arthritis, the referred pain from the neck.

Conclusion on entitlement to further weekly income replacement benefits:

To establish entitlement, Mr. Alves must prove on a balance of probabilities that as a result of one or other of the accidents, he has been left with a substantial inability to perform the essential tasks of his stated pre-accident employment. A long list of arbitration decisions have held that the applicant need not prove that the accident is the sole cause of the disability, but that it is sufficient if the accident makes a material or significant contribution to the disability.

In this case it is essential to keep in mind that Mr. Alves defined his pre-accident employment as being that of a carpenter engaged full time in sub-contracting work supplemented by renovations to private residences. There is no doubt in my mind that the chronic pain associated with the injury to Mr. Alves' neck and the associated headaches has contributed to Mr. Alves' present condition. The injury to the neck may even have been sufficient to have interfered with his ability to complete the renovations to the home he purchased, but when this injury is seen in the context of the other far more serious problems that Mr. Alves suffers from, I do not believe that it was a significant factor in preventing Mr. Alves from returning to full time employment as a carpenter. I am satisfied that Mr. Alves' pre-existing troubles, and in particular the injury to his back, and then his shoulder; which continued to deteriorate to the point where it had to be operated on, were sufficient in and of themselves to have prevented Mr. Alves from ever returning to his gainful employment as a carpenter.

Entitlement to funding for chiropractic treatment:

Mr. Alves received chiropractic treatment from Dr. Manuel Rodrigues D.C. He also received physiotherapy treatment from a clinic owned by Dr. Rodrigues. Only the outstanding chiropractic accounts were in issue. Mr. Alves was referred to Dr. Rodrigues immediately after the accident. Initially Mr. Alves was treated five times per week. As of January 1996, the frequency of the visits was reduced to two per week. The treatments continued until the surgery in late July. The treatments resumed in September at the rate of twice per week, and were ongoing as of the date of the hearing. Dr. Rodrigues was not sure about how much of his account had been paid. It would appear from a printout filed at the hearing, that his accounts were satisfied until the release of a Rehabilitation DAC report in March 1996. The outstanding amount as of March 26, 1997 was $3148.30.

Dr. Edward Crowther D.C. conducted a DAC assessment at the end of March 1996. He concluded that it was unlikely that any ongoing soft tissue therapy or ultrasound would change the course of Mr. Alves' condition. He also opined that Mr. Alves had received a "satisfactory" course of manipulative therapy. He concluded that no further chiropractic care was indicated.

Dr. Rodrigues advised that the care afforded after the spring of 1996 was essentially supportive and was designed to alleviate Mr. Alves' symptoms. He justified the ongoing expense on the basis that it reduced the frequency and intensity of Mr. Alves' headaches and reduced his reliance on medication.

Pain palliation has frequently been recognized as a legitimate goal of therapy. However in the face of the DAC report, I am of the view that Dr. Rodrigues must present compelling evidence that the treatments are in fact effective in providing the suggested relief. In this case I received nothing to suggest that any formal testing or outcome evaluations were conducted. There are some indications in Dr. Martins' notes that the massage component provided some short lived relief. Mr. Alves testified that it made him feel better, but that was the extent of the evidence.

Mr. Alves has received almost continuous treatment. During the contested period the treatments were continuing twice per week. To my mind, to justify that kind of expense, some form of formal evaluation is required. This is particularly so in a case such as this where the bulk of the evidence suggests that notwithstanding the considerable treatment received, Mr. Alves' neck complaints and headaches continue unabated. I am not satisfied that the Applicant has demonstrated that the outstanding expense is reasonable. This claim fails.

EXPENSES:

Mr. Alves' claim was ultimately unsuccessful. However, it was pursued in good faith and was supported by his medical advisors. In addition Mr. Alves was successful on the preliminary issues related to the second accident. If expenses cannot be agreed upon I may be spoken to.

May 13, 1999

Stewart McMahon

Arbitrator

Date

Appendix A

upstairs. I've prepared my reasons on the two preliminary defences advanced by the insurer. I'm in your hands, Mr. Azevedo. I can deliver them now before the interpreter gets here or I can wait.

MR. AZEVEDO: I don't see---I don't think we need the interpreter for that.

281. THE ARBITRATOR: Okay, why don't we do this then? I'll deliver the reasons and then, irrespective of whether the interpreter gets here or not, we'll break for a couple of minutes so that you can explain the reasons to your client and if the interpreter is not here I'll spend that time finding out where they are.

MR. AZEVEDO: Okay.

282. THE ARBITRATOR: All right then, Mr. Alves was injured in a motor vehicle accident on December the 30th, 1994. He applied for and received income replacement benefits from Commercial Union. Mr. Alves was involved in a second accident on April 5th, 1995. Mr. Alves reported the second accident to his broker the next day and submitted a claim pursuant to the collision coverage. He did not claim accident benefits and the insurer's file materials suggested Mr. Alves indicated he was not injured in the accident.

The benefits arising from the 1994 accident were terminated on May the 4th, 1995. Mediation of the dispute concerning the termination failed and Mr. Alves applied for arbitration. The hearing into Mr. Alves' entitlement to ongoing income replacement benefits and reimbursement of chiropractic treatments was conducted over the course of five days in March, April and June of 1997.

Just prior to the commencement of the hearing, Mr. Atherton indicated to Mr. Azevedo that he would be taking the position that if it were (A) established that there was ongoing disability, and (B) it was established that it was trauma-induced rather than due to degenerative processes, that he, Mr. Atherton, would be arguing that the ongoing disability was attributable to the second rather than the first accident.

In effect, during the hearing Mr. Atherton put questions to a number of witnesses designed to establish that defence. In response, in the midst of the hearing, Mr. Azevedo on behalf of his client completed and submitted an application for benefits with respect to the April, 1995 accident. That application was denied.

I did not learn of the outstanding application related to the 1995 accident until submissions in early June and on my own initiative I arranged a conference call because of concerns that the two claims should be dealt with jointly. Over Mr. Atherton's objections, I ordered that the hearing into the '94 accident should be adjourned until such time as the hearing into the '95 accident was ready to proceed.

This present decision takes place within the context of the resumption to deal with the 1995 accident. At the commencement of the resumption, Mr. Atherton raised two preliminary defences. The first was that the application for benefits did not in fact demand payment of any benefit and, accordingly, there was no dispute to arbitrate. The second defence related to the notice provisions at Section 59 of the schedule and Mr. Atherton argued that the first notice to the company of an intention to apply for benefits came well outside the 30 day period provided for in Section 59(1) of the schedule.

I will deal with the two defences seriatim. As noted earlier, Mr. Azevedo completed the application form on behalf of his client. In part 3 which concerns the details of the accident, the date, time and the brief description are provided. In response to the question, "Were you able to return to your normal activities following the accident?" the "yes" box is ticked. In response to the question, "Did you go to the hospital?" the "no" box is ticked. Part 6 which is concerned with expenses is left blank other than the answer to the question, Are you applying for expenses as a result of this accident?" to which the "no" box is ticked. Part 10 is concerned with employment history. Under employment it is noted that Mr. Alves was employed as a carpenter until December 30th, 1994. No answer was given to the question, "Do your injuries prevent you from performing the essential tasks of your current employment?"

The covering letter signed by Mr. Azevedo states, "Please note that Mr. Alves does not allege that he was injured in this accident. This application is being submitted only because Mr. Atherton has suggested that he may have been." The insurer's explanation of assessment states that Mr. Alves is not eligible for income replacement benefits. In the comments box under the weekly benefits section is noted the following, "The application is submitted 31/03/97," indicated that Mr. Alves does not allege that he was injured in this accident. No request of accident benefit coverage under this claim.

In argument Mr. Atherton characterized the application as a nullity stating that the application did not in fact seek the payment of any benefits. Mr. Azevedo rejected the notion that the application was a nullity, but suggested that it was a fiction. He stated that the explanation was silent on the demand for benefit because of his client's belief that the source of his disability was the first rather than the second accident. He reiterated what he had indicated in the letter, namely---sorry, he indicated in the letter that accompanied the application, namely, that the application was submitted and the matter pursued through arbitration in response to the position taken by Mr. Atherton and to protect against the possibility that an arbitrator might find the second accident responsible. He indicated that he filled out the application in the manner he did because he believed that to do otherwise would have been inconsistent with his client's belief that he was not injured in the second accident.

From our part, I do not see any inconsistency. Making a clear demand would simply be a recognition of the fact that his client's self-perception may not be accurate. It certainly would have been preferable if a clear demand was enunciated in the application, but there is no doubt in my mind that in the circumstances the insurer clearly knew that Mr. Alves was seeking payment of income replacement benefits to protect against the possibility that an arbitrator might find that any disability was attributable to the second accident. The mere fact that the insurer completed the income replacement benefits portion of the explanation of assessment form is evidence that it knew what was being applied for.

I do not agree that the application is a nullity as suggested by Mr. Atherton and dismiss the insurer's first preliminary defence. I turn now to the notice defence. Section 59(1) states, "A person who wants to apply for benefits under this regulation shall notify the insurer within 30 days after the circumstances arose that gave rise to the entitlement to benefits or as soon as practical thereafter."

There is no dispute but that the first notice to the insurer did not come within the 30 days. However, subsection 4 of Section 59 provides relief from forfeiture in the following terms, "A failure to comply with the time limit set out in subsection 1 or 3 does not disentitle a person to benefits if the person has a reasonable excuse."

Mr. Atherton argues that the excuse proffered, namely that the notice was not provided because Mr. Alves did not believe that he was injured and a claim was only initiated in response to a contrary suggestion made by the insurer, was not reasonable. Mr. Azevedo suggested that it would be absurd if the insurer could well after the 30 days had elapsed raise the spectre of the second accident and at the same time object to the application on the basis of lack of notice.

Section 129 of the Insurance Act provides the basis for the traditional exercise of relief from forfeiture powers. In a number of decisions arbitrators have concluded that on the wording of Section 129 that power is restricted to a court of competent jurisdiction and can not be exercised by arbitrators.

That question is not before me. However, there is no doubt that an arbitrator does have the power to grant relief pursuant to Section 59 of the schedule. To my mind Section 59 is a limited form of relief from forfeiture restricted to the notice requirements contained in Section 59. That being the case, it makes sense to look to the ways in which courts have interpreted relief from forfeiture provisions.

Traditionally these provisions have empowered courts to grant relief where it would not be inequitable to do so. By necessity this means that the impact of the imperfect compliance upon the insurer becomes an important part of the equation. Brown and Menzies in their text, Insurance Law in Canada, put the notion at page 229, "In addition to these factors relevant to the conduct of the insured, the concept of equity in the context of the legislation also takes account of the insurer's position. From this perspective the test used by the courts in deciding whether to grant relief is whether the insurer has been prejudiced by the imperfect compliance. If the insurer has been prejudiced, relief will not be granted. Conversely, where the insurer is not prejudiced, grant of relief is more likely but not absolutely certain."

The use of the phrase "reasonable excuse" in Section 59(4) suggests to me that more emphasis is to be placed upon the insured's own circumstances and less on that of the insurer. However, the purpose of the notice provision in Section 59 is to afford the insurer an early opportunity to investigate the matter and to participate in the insured's rehabilitation.

To my mind it follows that the provision in that same section that relieves the insured from the forfeiture normally consequent upon a failure to give timely notice cannot ignore prejudice to the insurer. If this is true, the obverse must also be true; the absence of prejudice will also factor into the question of what is a reasonable excuse.

During submissions I asked Mr. Atherton if he agreed with this position. He indicated that, to the contrary, he took the position the presence or absence of prejudice to the insurer was irrelevant. Mr. Atherton submitted the decision of Arbitrator Manji in Singh and Dominion of Canada, O.I.C. file # A96-000272 dated October 3, 1997 as support for the proposition.

I do not believe that the case stands for the proposition cited by counsel. In the Singh case the applicant argued that he had in fact notified the insurer in a timely fashion. The arbitrator found to the contrary, that he had not provided notice and no excuse was proffered. As an alternative argument, the applicant argued that in the absence of prejudice to the insurer, he ought to be entitled to proceed. Notwithstanding Arbitrator Manji rejected that notion saying at page 9, "Subsection 59(4) of the schedule provides the only relief from forfeiture provision in respect of the time limits set out in Section 59(1). I have found Mr. Singh has not established that he meets the requirement of that provision. He does not have an excuse for failing to comply with the time limits set out in Section 59(1). No other provision in the Act or schedule confers upon me the power to extend or suspend the time limits set out in Section 59(1) of the schedule."

In effect, the applicant was asking the arbitrator to exercise a general power of relief from forfeiture. That is not the same thing as saying this is a question of prejudice to the insurer or the absence thereof. It's not a consideration when asking whether the excuse is reasonable. In fact, Arbitrator Manji then goes on to distinguish Arbitrator Renahan's decision in Kuronen, file # A951897 dated December 29th, 1995, a decision which I note parenthetically was not provided to me. In Kuronen, Arbitrator Renahan was considering Section 22 of the previous schedule. "In some respects the relief provisions found in Section 22 are stricter, but for our purposes the significant fact is that both refer to the need for a reasonable excuse for reasons similar to those that I've expressed above."

Arbitrator Renahan expresses the view that it's useful to refer to court cases dealing with the relief of forfeiture provisions. On page 6 he puts the matter in this fashion, "In my opinion, the reasonable excuse advanced by the claimant must be examined with regard to all of the circumstances connected to the delay including prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequence of the failure to comply with the time limit."

I agree with and adopt Arbitrator Renahan's characterization of the test. In this case the insurer offered no suggestion that it had been prejudiced by the insured's delay in providing notice of his intent to apply for benefits, nor can I envisage any. In effect, the possibility of exposure for a claim based on the '95 accident only arises because the insurer asserts the possibility that the applicant may, contrary to his own belief, have been disabled as a result of the second accident.

The insurer had early notice of the fact of the accident which, while it is not the same as notice of an accident benefits claim, is relevant to the question of what the insurer knew. More importantly, by virtue of the ongoing claim arising from the first accident, it had plenty of opportunity to investigate the medical aspects of the claim and had in fact decided to terminate both weekly benefits and rehabilitation benefits based upon examinations undertaken after the second accident. Other than the loss of a defence based upon the second accident being barred, and with some minor exceptions is the insurer's global exposure to pay benefits greater if the cause of any impairment is the second rather than the first accident?

On the other side of the scale, if the applicant is not permitted to proceed with a claim based upon the '95 accident and I eventually accede to the insurer's argument that it is the second rather than the first that is the cause of any ongoing trauma-induced disability established by the applicant, Mr. Alves will be irreparably harmed inasmuch as he will have no avenue to secure benefits.

In my view on balance the excuse proffered in this case is undoubtedly reasonable and the late notice does not bar the applicant from proceeding. Those, Gentlemen, are the rulings on the two preliminary defences. It stands obviously then to be determined upon the evidence concerning his disability or lack thereof and whether it's linked to the first or the second accident or is alternatively attributable to some degenerative process if in fact it's established that it exists at all or at least to the extent required by the section.

MR. AZEVEDO: Shall we break then and find out what's happening with the interpreter?

283. THE ARBITRATOR: I think we should break. You can explain my rulings to your client. Hopefully when we return we'll find the interpreter sitting out there. If not, I'll find out where he or she is. MR. AZEVEDO: Okay.

284. THE ARBITRATOR: Five minutes. MR. AZEVEDO: Sure. (Short Recess)

285 THE ARBITRATOR: We had some brief discussions, but I think we better at this point deal with it on the record. The first is that we do not have an interpreter here this afternoon. I'll take responsibility for

Neutral Citation: 1999 ONFSCDRS 86

FSCO A96–000247

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

AMERICO ALVES

Applicant

and

COMMERCIAL UNION ASSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Mr. Alves' claim for weekly income replacement benefits is dismissed.

2. Mr. Alves' claim for supplemental medical expenses is dismissed.

May 13, 1999

Stewart McMahon

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94 and 463/96. O.R. 776/93 was extensively modified by O.R. 781/94; accordingly, where necessary, "1994 Schedule "refers to the original O.R. 776/93, and "1995 Schedule "refers to O.R. 776/93 as amended.