Neutral Citation: 2000 ONFSCDRS 111

FSCO A98-000805

BETWEEN:

IRENE M. GAUTHIER

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION

Before:

Stewart McMahon

Heard:

July 12, 13, 14, 15 and October 1 and 7, 1999 at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Robert A. Besunder for Mrs. Gauthier

Colin S. Jackson for Allstate Insurance Company of Canada

The Applicant, Irene M. Gauthier, was injured in a motor vehicle accident on May 31, 1994. She applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.¹ Two years later, on May 31, 1996 the Insurer delivered a letter to Mrs. Gauthier by courier. The letter stated that her income replacement benefit was being terminated immediately and that no loss of earning capacity benefit offer would be made. In addition the Insurer advised that it would no longer fund various supplementary medical and rehabilitation expenses. The parties were unable to resolve their disputes through mediation, and Mrs. Gauthier applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The outstanding income replacement benefit issue and a number of the supplementary medical and rehabilitation issues were settled just prior to the commencement of the hearing. However, Mrs. Gauthier maintains that she is entitled to a loss of earning capacity benefit, the balance of the supplementary benefits, and a special award.

The issues in this hearing are:

Is Mrs. Gauthier entitled to a loss of earning capacity benefit offer pursuant to section 21(1) of the Schedule?
Is Mrs. Gauthier entitled to the following supplementary medical and rehabilitation benefits: the purchase of a TENS machine, payment for massage therapy, and the payment of premiums towards a work-related extended health care plan, pursuant to sections 36 and 40 of the Schedule?
Is Mrs. Gauthier entitled to housekeeping and home maintenance services including: lawn care, snow removal, driveway cleaning, and interior painting and wallpapering, pursuant to section 55 of the Schedule?
Is Mrs. Gauthier entitled to a special award?
Is either party entitled to its expenses?

Mrs. Gauthier is entitled to a loss of earning capacity benefit offer.
Gauthier is entitled to 6 hours of housekeeping services every two weeks
Mrs. Gauthier is entitled to $127.89 per annum for home maintenance expenses.
Mrs. Gauthier is entitled to a special award of $1,750.
I may be spoken to on the issue of expenses if necessary.

Background:

Mrs. Gauthier is a 39 year old mother of three. She and her husband Bill Gauthier and two of their children live in a single family dwelling in Scarborough.

(i) Employment

Mrs. Gauthier entered the workforce after graduating from grade 11. She stayed at home for a few years while the children were very young, but contributing financially has always been very important to Mrs. Gauthier and she returned to work after her third child was born.

At the time of the accident, Mrs. Gauthier was working as a "dietary aid" at a local nursing home. The job can best be described as part waitress and part kitchen help. At meal times the dining room was staffed by one full-time employee and two part-time employees. Mrs. Gauthier was a "part timer." Her shifts ranged from 2 hours to 8 hours. Most were at the shorter end of the range.

Prior to meal time, the part-time staff set the tables and helped prepare light foods such as sandwiches. During the meal, they served the residents by carrying up to eight plates on large trays. After the meal they used large carts to clear the tables. They also cleaned the tables and kitchen, rinsed the dishes, stacked them in dishwashers and later unloaded them and put them away. There was little opportunity for breaks during meal time, and the staff were on their feet almost continuously.

(ii) The Accident and Mrs. Gauthier's Physical Condition

On May 31, 1994, Mrs. Gauthier was seated in the driver’s seat of her van when an unattended vehicle rolled down a hill colliding with the driver’s side of her vehicle. Mrs. Gauthier was thrown sideways striking the outside (lateral aspect) of her knee against the transmission housing.

Mrs. Gauthier went home after the accident. She saw her family doctor the next day. She testified that she complained of neck, back and knee pain. The doctor’s note contains no reference to knee complaints. Mrs. Gauthier admitted that there was no sign of bruising or swelling on her knee at the time of the accident or the next day. However, on June 6 the doctor recorded that Mrs. Gauthier’s knee had bothered her since the accident. He prescribed heat and a tensor bandage.

I am satisfied that Mrs. Gauthier struck her knee on the transmission housing, and that it was symptomatic almost immediately. It would appear that initially the knee pain was overshadowed by the neck and back pain.

Mrs. Gauthier’s back and neck have remained symptomatic and she has developed some pain in her hip from poor posture. However, Mrs. Gauthier’s most significant problem has been ongoing trouble with her knee.

A few months after the accident, Mrs. Gauthier was referred to Dr. Sattarian, an orthopaedic surgeon, because of ongoing knee pain. Dr. Sattarian suspected that Mrs. Gauthier had injured her patella (knee cap) during the collision. He prescribed physiotherapy and exercise, and cautioned her to avoid stair climbing. He reported to the family doctor that her symptoms would likely improve at least to some extent within 2-3 months."

Approximately two months later, in mid-October, Mrs. Gauthier fell while climbing her basement stairs, striking the inside (medial aspect) of her knee. Mrs. Gauthier reported to Dr. Sattarian that she fell because her knee gave way. It is important to note that Mrs. Gauthier made this statement at a time when her benefits were being paid and she had no apparent reason to lie to the doctor about the circumstances of the fall. Mrs. Gauthier told a rehabilitation counsellor retained by the Insurer, about the fall, but no one took any steps to try and differentiate between the effects of the fall, and the car accident until much later. The significance of the fall has now become a central issue in these proceedings.

Mrs. Gauthier's symptoms did not improve after the fall on the stairs. In January 1995, approximately 8 months after the motor vehicle accident, Dr. Sattarian performed arthroscopic surgery on the knee, and referred Mrs. Gauthier for further physiotherapy.

Initially, it appeared that the surgery had been successful. Mrs. Gauthier reported to Dr. Sattarian in March that she "got better by about 70-75%." At about the same time, Dr. Welsh conducted an orthopaedic examination on behalf of the Insurer. He reported that Mrs. Gauthier would likely be able to return to work in two or three months.

However, stair climbing continued to aggravate Mrs. Gauthier's pain and she continued to feel that her right knee was in danger of giving way. During subsequent visits to Dr. Sattarian she continued to complain that her knee was sore, and her progress in the physiotherapy program was fairly slow.

The Insurer retained an occupational therapist to follow up on Dr. Welsh’s report. The therapist delivered a report in August 1995 suggesting a very conservative return to work program, over 16 to 20 weeks. The employer agreed to the proposal provided that the Insurer would be responsible in the event that Mrs. Gauthier re-injured her knee while at work.

The return to work program started in October. Mrs. Gauthier testified that she worked for two hours on alternating days. She indicated that she was treated as an extra staff member with no specified duties. She helped out with the serving by carrying a single plate at a time, or assisted by serving coffee and tea. Mrs. Gauthier testified that as soon as she started the work hardening program she noticed a significant increase in her knee pain, and was constantly worried about her knee giving way.

In mid-November, the occupational therapist reported that Mrs. Gauthier was unable to tolerate her current schedule on a consistent basis. In addition, it turned out that Mrs. Gauthier’s fear about her knee giving way was well founded. On November 27, Mrs. Gauthier fell while trying to help a resident. She has not returned to the seniors' residence since this incident. Dr. Sattarian prescribed a cane shortly thereafter.

In January 1996, Mrs. Gauthier was reassessed by Dr. Welsh. He reported that from a physical viewpoint, Mrs. Gauthier had made a good recovery and that her continued belief that she remained disabled was not "justified." He encouraged her to return to her normal responsibilities.

Mrs. Gauthier contacted the Insurer to complain about Dr. Welsh’s examination even before the report was delivered. The Insurer agreed to send her for another examination. Mrs. Gauthier was seen by a multidisciplinary team at the Toronto Hospital. The orthopaedic examination was conducted by Dr. Barry Malcolm.

Dr. Malcolm acknowledged that non-physical reasons were contributing to Mrs. Gauthier's disability and that her complaints were out of keeping with the injury. However, unlike Dr. Welsh, he thought that there was a physical basis for Mrs. Gauthier's ongoing complaints, and that her knee would remain symptomatic on a long-term basis.

Dr. Malcolm was the first physician to comment on the significance of Mrs. Gauthier's fall on the stairs in October 1994. Dr. Malcolm reported that Dr. Sattarian's post operative note indicated that when he conducted the arthroscopic surgery in January 1995, he had found two distinct pathologies in Mrs. Gauthier's knee. One injury was to the patella, the other to the femoral condyle. Dr. Malcolm stated that the latter injury was far more significant than the former, and was the principle cause of Mrs. Gauthier's ongoing symptoms.

The Insurer's referral letter posed the following question:

In your opinion does this patient continue to suffer from a disability resulting from the accident in respect of which the weekly benefits are paid?

He answered as follows:

In my opinion, Ms. Gauthier does continue to suffer from some legitimate right knee impairment/disability as a result of the motor vehicle accident in question (May 31, 1994), and to the direct blow incident which occurred in October 1994 (the latter being the more major contributor). In addition, she has subjective complaints in her neck and low back, which in my opinion are not of such nature as to produce disability.

When Dr. Malcolm testified he elaborated on these matters. He explained that the damage to the patella was on the outside of the knee and was consistent with Mrs. Gauthier's evidence that she had struck this part of her knee during the motor vehicle accident. He went on to explain that the damage to the femoral condyle was on the inside part of the knee, and that it was far more likely that this injury occurred when Mrs. Gauthier fell and banged the inside part of her knee on the stairs. He described the damage to the condyle in quite dramatic terms referring to it in his report as a "huge ulcer." He stated in his report, and his testimony, that this type of lesion is often associated with chronic knee complaints related to prolonged standing, stooping and kneeling.

Dr. Malcolm testified that Mrs. Gauthier could consider a return to modified duties but that at the time he saw her, she was not fit to return to her usual pre-accident duties.

(iii) The Termination of Benefits

The Insurer received Dr. Malcolm’s report on April 26, 1996, approximately a month before the second anniversary of the accident. The Insurer received a medical and rehabilitation designated assessment centre (MED DAC) assessment at about the same time.

On Friday, May 3 the adjuster called Mrs. Gauthier to arrange an appointment for the next Tuesday to discuss a possible resolution of all outstanding issues. At that point Mrs. Gauthier had a copy of Dr. Malcolm’s report, but she did not have the MED DAC report. Mrs. Gauthier called back at the end of the day and left a message for the adjuster. He returned the call on Tuesday at which time Mrs. Gauthier told him that she would like a chance to review the MED DAC report before they met. He agreed to send the report. He also told her that he had been instructed to arrange a vocational assessment. The vocational assessment was undertaken on May 14 and the report was received by the Insurer on May 23. The report suggested a return to part-time sedentary work. The report was not forwarded to Mrs. Gauthier prior to the termination of benefits.

On May 28, three days shy of the second anniversary, a supervisor reviewed the file and left the adjuster the following note:

I strongly feel we need to deny based on causality and have that issue resolved before we consider LECB. Making a 0 offer now we could lose the opportunity to argue causality and we'd be into dispute about $ offer vs. issue of ongoing disability on 2 yr test as result of mva.

In accordance with those instructions the adjuster sent Mrs. Gauthier a letter by courier on May 31 (the second anniversary of the accident). The letter advised that her IRBs had been terminated and that because she was not receiving benefits beyond 104 weeks that no loss of earning capacity benefits would be paid.

The adjuster testified that he sent the letter by courier because he believed that if Mrs. Gauthier did not receive the notice before the end of the day, he would be obliged to make a loss of earning capacity benefit offer.

The adjuster testified that the only reason he did not meet with Mrs. Gauthier before May 31st was because she failed to call to arrange a meeting after she received the MED DAC report. I reject this assertion. It was his responsibility to provide her with a copy of the vocational assessment report and then arrange a meeting. Instead, in accordance with his supervisors instructions, he terminated benefits, without any further attempts to meet with Mrs. Gauthier.

For reasons that I will discuss in more detail later, the Insurer thought that Dr. Malcolm's report was a DAC assessment. The Insurer now concedes that Dr. Malcolm's report was merely a second insurer's medical examination (IME) and that the termination of the IRBs was not carried out in accordance with the provisions mandated by section 64 of the Schedule. On the eve of the hearing the IRB issue was resolved when the Insurer agreed to bring the payments up to date.

Is Mrs. Gauthier entitled to a Loss of Earning Capacity Benefit Offer?

The first formal step in the transition from income replacement benefits (IRBs) to loss of earning capacity benefits (LECBs) is the presentation of an LECB offer by the insurer. The Schedule mandates that the insurer make such an offer if the insured person has continued to qualify for IRBs, 104 weeks after the onset of disabilty. One of the major issues in this case involves identifying the starting point and hence the end point of the 104 week period. The precise wording of section 21(1)1 becomes important in this analysis, therefore I set it out in full here:

21(1) Subject to subsections (7) to (9), an insurer shall promptly deliver a written offer to an insured person with respect to the payment of weekly loss of earning capacity benefits if one or more of the following circumstances occurs:

The insured person qualified for weekly income replacement benefits under part II and continues to qualify for those benefits 104 weeks after the onset of the disability in respect of which he or she first qualified for those benefits.

The Parties positions

In this case there is no dispute that the Insurer paid IRBs up to the second anniversary of the accident, prior to delivering a termination notice. In its opening statement, the Insurer conceded that if the 104 week period referred to in section 21(1)1 ended on the second anniversary of the accident, that having paid IRBs throughout the period, it was bound to deliver Mrs. Gauthier an LECB offer, and that it was too late for it to raise the causation issue as a defence to the payment of LECBs. However, counsel advanced two arguments in support of the contention that the 104 week mark fell beyond the second anniversary.

First, he argued that because section 8(3) of the Schedule provides that no payment is owing for the first week following the accident, the 104 week period referred to in section 21(1)1 starts one week following the accident, and hence does not end until one week after the second anniversary of the accident.

Alternatively, counsel argued that the onset of Mrs. Gauthier’s disability was delayed. He argued that the 104 week period did not begin until some time towards the end of June 1994, at the earliest, and accordingly did not end until late June 1996.

Counsel argued that in either event, the termination on May 31st was effective prior to the expiration of the 104 week period and consequently the Insurer was in a position to challenge Mrs. Gauthier’s entitlement to an IRB at the 104 week mark, before it was required to make an LECB offer.

During final submissions, counsel for the Insurer appeared to retreat from the admission that Mrs. Gauthier was entitled to an LECB offer if the 104 week mark coincided with the second anniversary of the accident. He argued that even if I found that the Insurer had paid IRBs without protest to the 104 week mark, it could still demand that the Insured prove that she qualified for the benefits she had received, before it was obliged to make an LECB offer.

Counsel conceded that in ordinary circumstances, if the insurer paid IRBs to the end of the 104 week period, it could be presumed to have accepted the fact that the insured person qualified for IRBs throughout period, and was accordingly entitled to an LECB offer. However, he submitted that in this case, the evidence established that as of May 28 (the date of the supervisor's note instructing the adjuster to deny based upon causation) the Insurer no longer believed that Mrs. Gauthier was entitled to IRBs. He argued that in these circumstances, the Insurer could raise the issue of Mrs. Gauthier's qualification for the benefit.²

For his part the Applicant's counsel conceded that if the Insurer had terminated IRBs within the 104 week period, it was entitled to put his client to proof of the fact that her ongoing disability was caused by the accident. He rejected the notion that the 104 week period was extended by virtue of the operation of section 8(3). He also rejected the notion that his client's disability was delayed. Finally, he rejected the notion that the Insurer could raise the causation issue after the fact, if it failed to raise this issue prior to the expiration of the 104 week period.

Analysis:

(i) The section 8(3) argument

The Insurer argued that because section 8(3) provides that no benefit is payable for the first week of disability, the 104 week period does not commence until one week following the accident and ends one week beyond the second anniversary of the accident. To my mind, this argument ignores the wording of section 21(1)1 which defines the time for the offer as occurring 104 "weeks after the onset of disability" not 104 weeks after the insurer commences paying benefits.

(ii) When did disability commence?

Was the onset of disability delayed? If the answer is yes, it follows that the commencement of the 104 week period should also be delayed, and hence would not end until some time beyond the second anniversary.

The Insurer advanced two distinct grounds for arguing that the onset of disability was delayed. The first was the absence of any immediate complaint concerning the knee. The second was the fact that Mrs. Gauthier attended at work on a number of occasions in the weeks following the accident.

The first argument fails on two grounds. First, it ignores that the onset of Mrs. Gauthier’s disability is not limited to her knee complaints. As already noted, she complained the day after the accident of both neck and back pain and her doctor prescribed rest. Second, it ignores the fact that in the family doctor’s note of January 6 (when he first refers to the knee), he records that Mrs. Gauthier has been bothered by crepitus (grinding) in her knee since the accident. In my view, the second argument, related to her attendance at work in the weeks following the accident must also fail.

As already noted, Mrs. Gauthier visited her family doctor the day after the accident. He prescribed rest. In accordance with those instructions she remained off work on June 1 and 2. On June 4 she returned to work for a 6 hour shift. She then called in sick on June 5 and 6 but reported to work for a 2 hour shift on June 7. From that point until July 11 Mrs. Gauthier was either not scheduled for work, or called in sick. On July 11, she reported for a two hour shift.

Part way through the shift she felt her knee "pop" and left work early. She did not return to work until July 18 when she was assigned a "desk job" for 6 hours. At the end of the shift she was told to remain off work until she was fit to resume her normal duties.

The Insurer relied principally upon the two attendances at work in the week following the accident. Counsel argued that Mrs. Gauthier’s ability to attend at work during these shifts is evidence that she was not yet disabled. This argument ignores the fact that in the days immediately before and after the two shifts, Mrs. Gauthier called in sick. The fact that Mrs. Gauthier reported for work on these isolated occasions represents nothing other than an honest effort to resume her obligations. Mrs. Gauthier should be applauded for these efforts, not penalized on account of them. As has been noted by other arbitrators, there is no better evidence of disability than an honest effort that fails.

For all of the above reasons, I conclude that the 104 week period ended on May 31, 1996. It follows from this conclusion that the Insurer paid IRBs throughout the 104 week period without challenging Mrs. Gauthier’s entitlement to receive them.

(iii) Can the Insurer still dispute its obligation to make an LECB offer if it does not challenge the insured person’s entitlement to receive IRBs prior to the expiration of the 104 week period?

As noted earlier, the first stage of the LECB scheme involves the presentation of an LECB offer by the insurer. Section 21 sets out the scenarios in which an insurer must make such an offer. In general terms the obligation is triggered in the event that the insured person continues to qualify for weekly benefits 104 weeks after the onset of disability.

The Insurer argues that notwithstanding that it paid Mrs. Gauthier an IRB throughout the 104 week period, it may now as part of the LECB process, put her to the proof of the fact that she qualified for the IRBs, before it is obliged to make an offer.

In my view, if the insurer wishes to challenge the insured's qualification for a weekly benefit, it must do so within the context of the weekly benefits provisions, prior to the time it is obliged to make and LECB offer. Section 64, which is part of the weekly benefits scheme, contains detailed rules for resolving disputes about the individual's entitlement to IRBs, including important procedural safeguards involving advanced notice of the insurer's intention to terminate benefits, and the right to have the disability issue examined by a DAC.

In contrast, the LECB scheme starts with the premise that the insured person is incapable of returning to her own occupation. The functional assessments that are contemplated by the LECB provisions are concerned only with the individual's residual capacity. If the drafters of the legislation had intended that the insurer could, as part of the first step in the LECB process, require the insured person to prove that they qualified for the weekly benefits they had received, some mechanism akin to section 64 would have been included to govern the resolution of this dispute.³ Requiring the insured person, as part of the LECB scheme, to prove that they qualified for the weekly benefits they received without protest, would import an additional element that is not reflected in the legislation.

The Insurer relies upon Fox and Economical Mutual Insurance Company, (OIC A96-002040, February 17, 1998). In my view the Fox case is distinguishable from the present case and is of little assistance. In the Fox case the insurer delivered a notice of termination in accordance with section 64 of the Schedule, approximately a month before the expiration of the 104 week period. The insured person requested a disability DAC assessment, which triggered the insurer's obligation to continue paying IRBs. Because the assessment process was not completed within the remaining month, the insurer was bound by the terms of section 64 to continue paying IRBs beyond the 104 week mark. The DAC assessors ultimately reported that Mr. Fox was no longer disabled, thereby authorizing the insurer to terminate the benefit.

Mr. Fox argued that because the insurer was not authorized to stop paying the benefit, and in fact continued to pay beyond the 104 week mark, it ought to have delivered an LECB offer on the second anniversary of the accident.

Arbitrator Palmer focused on the wording of section 21(1) which requires the insurer to make the LECB offer "promptly." She noted that the very use of this word suggested that the insurer is afforded some leeway in when it makes the offer. She concluded that because the insurer put the insured person’s qualification for ongoing IRBs in issue prior to the expiration of the 104 week period, it would be inappropriate to require the insurer to make an LECB offer prior to the release of the DAC report, and if necessary, an arbitrator’s ruling on the IRB issue.

In my view the key point that distinguishes the Fox case is the fact that the insurer had put the question of the insured person’s entitlement to ongoing IRBs in issue in the context of the weekly benefits scheme not as part of the LECB scheme. In these circumstances, Arbitrator Palmer quite correctly concluded that the LECB stage would be delayed until after the weekly benefits issue was resolved.

I conclude that in ordinary circumstance, if the insurer pays IRBs to the end of the 104 week period, without invoking the stoppage provisions of section 64, it is too late to challenge the insured person’s qualification for IRBs and it must make an LECB offer. I say in ordinary circumstances, because there may be cases where for example fraud is proven that would justify the insurer withholding an LECB offer, notwithstanding that it paid IRBs throughout the 104 week period without challenge.

I recognize that the Insurer did not receive the report that first raised the possibility of a causation argument, until about a month before the 104 week mark. However, even at that late date it could still have invoked the stoppage provisions of section 64, before the end of the 104 week period. It did not do so. I also take note that, Mrs. Gauthier did not hide anything from the Insurer. It was aware of the fall and could have investigated the significance of that event sooner if it had seen fit. It may seem harsh to foreclose the Insurer from challenging Mrs. Gauthier's qualification at this juncture, when it would have been well within its rights to have done so if it had acted even a couple of weeks earlier, but some finality is necessary, and in the absence of some wrong doing on Mrs. Gauthier's part, it would be just as inappropriate to allow the Insurer to re-open the matter after the fact.

To my mind the fact that the Insurer had reason to believe that Mrs. Gauthier was no longer qualified is immaterial. The determining factor is that the Insurer did not act on that belief prior to the 104 week mark.

I conclude that Mrs. Gauthier is entitled to an LECB offer.

(iv) Was Mrs. Gauthier qualified to receive IRBs 104 weeks after the onset of her disability?

In the event that I am wrong concerning the Insurer's right to challenge Mrs. Gauthier's qualification for an IRB, I will deal with her entitlement to an IRB at the 104 week mark.

The resolution of this issue involves three distinct questions. First, was Mrs. Gauthier disabled at the two year mark? Second, if the answer to question one is yes, then does the disability arise from the blow to the knee suffered in the motor vehicle accident, or alternatively does it arise from the blow to the knee suffered in the fall on the stairs? Third, if the answer to the second question is that it arises from the fall on the stairs, is that impairment "caused" either directly or indirectly by the motor vehicle accident?

Mrs. Gauthier's medical advisors have all opined that as of May 1996, she was incapable of returning to her employment at the seniors' residence. Dr. Malcolm reported that she was ready to return to work through a graduated return to work process. However, he admitted on cross-examination that she was not yet able to resume her full duties as of the date he saw her on March 25, 1996.

The only dissenting opinion was provided by Dr. Welsh. He characterized her condition as a regional pain syndrome and suggested that there was no underlying significant injury. Dr. Malcolm’s careful review of Dr. Sattarian’s surgical notes effectively points out the error in Dr. Welsh’s conclusion.

I find that as of May 31, 1996, Mrs. Gauthier was substantially unable to perform the essential tasks of her pre-accident employment.

On the second question, I find that the ongoing disability is attributable to the fall on the stairs. Mrs. Gauthier was referred to Dr. Sattarian in mid July 1994, because her attempts to return to work had been unsuccessful and she was continuing to complain about her knee. Dr. Sattarian arranged for a physiotherapy program which Mrs. Gauthier attended throughout the late summer and fall.

Mrs. Gauthier testified that there had been no improvement in her knee prior to the fall on the stairs in October 1994. However, shortly after the fall, Mrs. Gauthier reported to Dr. Sattarian, that prior to the fall on the stairs, she had been doing quite well in the physiotherapy program. In addition I refer to Dr. Sattarian’s note of October 26, in which he records that "she tells me that there was about 75% improvement prior to the fall." Mrs. Gauthier testified that when she made this statement she meant that the pain had decreased, but that there had been no appreciable improvement in her level of function. I reject this assertion. If Mrs. Gauthier was enjoying what can only be characterized as a dramatic reduction in the pain in her knee, but no appreciable increase in function, one would have expected her to have raised this point with the doctor. The general statement that her knee had improved by 75% was made prior to any dispute with her insurer over the cause of her ongoing difficulties. I find that Mrs. Gauthier's statement to Dr. Sattarian in October 1994, more accurately reflects her condition at the time.

In concluding that there were significant improvements in both function and pain, I also note that no attempt was made to corroborate Mrs. Gauthier's testimony such as by filing the physiotherapy clinic's notes. If there had been an appreciable reduction in pain but no increase in function, this most certainly would have been reflected in these notes.

In conclusion, I find that in the months leading up to the fall on the stairs, Mrs. Gauthier's knee was improving significantly. This evidence is not determinative. For example, the improvement might not have persisted if the fall on the stairs had not intervened. She may even have suffered a set back in the absence of any subsequent trauma. However, the improvement must be considered as strong evidence that the impairment suffered after the accident was resolving, and but for the subsequent fall on the stairs, Mrs. Gauthier would have been fit to work by no later than the spring of 1998.

In reaching my conclusion, I have also considered the medical opinions on the matter. The only doctor to address the matter in any detail was Dr. Malcolm. As noted above, Dr. Malcom acknowledged that the injury to the outside of the knee was likely contributing to her ongoing disability, but that the injury sustained in the fall was the major" contributing factor.

Arbitrators have consistently held that the accident related injuries need not be the sole cause of the individual's disability, but that they must make a "material contribution." See for example the recent decision of Arbitrator Baltman in Matichuk and Commercial Union Assurance Company (A98-000318, March 19, 1999) and the cases cited at footnote 3 of that decision.

The onus lies upon the Applicant to establish by the preponderance of evidence that the injury complained of continues to make a material contribution to her disability. I have concluded that the Applicant has failed to meet that onus. The principle medical opinion falls short of saying that the injury to the medial aspect of the knee represents a "material contribution", and Mrs. Gauthier’s history suggests that the knee was improving significantly prior to the fall on the stairs.

I turn now to the last question. Can it be said that the injury to the lateral aspect of the knee, that occurred when Mrs. Gauthier fell on the stairs, was caused, either directly or indirectly, by the motor vehicle accident? I conclude that the answer to this question is yes.

In the often cited decision of Amos v. ICBC (1995), 1995 CanLII 66 (SCC), 127 D.L. R. (4th) 618, the Supreme Court of Canada enunciated a two-part test to be employed when disposing of causation questions. Justice Major, speaking for the court, defined the test as follows:

Did the accident result from the ordinary and well-known activities to which automobiles are put?
Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant’s injuries and the ownership, use or operation of his vehicle......

The wording being considered in the Amos decision was not precisly the same as found in the Schedule, but the Court of Appeal in Vijeyekumar v. State Farm, 1999 CanLII 1640 (ON CA), [1999] O.J. No. 2178 indicated that the wording was sufficiently similar that the Amos test was applicable.

The two-part test set out by the Court represented a melding of two lines of cases. The first part emanated from the Supreme Court’s decision in Reliance Petroleum Ltd. v. Stevenson, 1956 CanLII 27 (SCC), [1956] S.C.R. 936. It is generally referred to as the "purpose test."

The second part emanated from the Supreme Court’s decision in Law, Union and Rock Insurance Co. v. Moore’s Taxi Ltd., 1959 CanLII 81 (SCC), [1960] S.C.R. 80. This second part is generally referred to as the "chain of causation" test. It is this second part of the test that is germane to our considerations. Justice Ritchie framed the test as follows:

It is sufficient to say that the words claims arising out of ...the ownership, use or operation... of any motor vehicle"....can only be construed as referring to claims based upon circumstances in which it is possible to trace a continuous chain of causation unbroken by the interposition of a new act of negligence and stretching between the negligent use and operation of a motor vehicle on the one hand and the injuries sustained by the claimant on the other[emphasis added].

Justice Ritchie did not speak of any intervening act as being sufficient to break the chain, but rather limited himself to a "new act of negligence." This reasoning is consistent with a number of cases dealing with a tortious driver's responsibility for further injuries sustained when a plaintiff fell while recuperating from injuries sustained in a motor vehicle accident.

The first case is Goldhawke v. Harder (1976), 1976 CanLII 1180 (BC SC), 74 D.L.R. (3d) 721, a decision of the B.C. Supreme Court. Mr. Goldhawke, who had broken both his legs in an earlier car accident, fell while descending a flight of stairs. Both legs were rebroken in the fall. Justice Macdonald started his analysis by citing a lengthy passage from Lord Reid's speech in the House of Lords decision in McKew v. Holland & Hannen & Cubitts (Scotland), Ltd., [1969] 3 All E. R. 1621 at 1623. I quote a small portion of the citation.

In my view the law is clear. If a man is injured in such a way that his leg may give way at any moment he must act reasonably and carefully. It is quite possible that in spite of all reasonable care his leg may give way in circumstances such that as a result he sustains further injury. Then that second injury was caused by his disability which in turn was caused by the defender's fault. But if the injured man acts unreasonably he cannot hold the defender liable... his unreasonable conduct is novus actus interveniens. The chain of causation has been broken....

So in my view the question here is whether the second accident was caused by the appellant doing something unreasonable.

The B.C. Supreme Court found nothing unreasonable in Mr. Goldhawke's attempt to descend a flight of stairs to reach a bathroom at a cabaret.

The second case I refer to is Priestly v. Gilbert, 1972 CanLII 425 (ON HCJ), [1972] 3 O. R. 501. Mr. Priestly, whose leg had been weakened by injuries sustained in a motor vehicle accident, fell and broke his leg while doing a drunken jig. Justice Osler concluded that Mr. Priestly knew or should have known that his leg had been weakened as a result of the motor vehicle accident, and that accordingly he had an obligation to "act reasonably and carefully and to protect himself from harm." Mr. Priestly’s failure to do so, amounted to a novus actus interveniens [an intervening event] that relieved the tortious driver from any responsibility for the additional injury.

The third case is Armstrong v. Stewart, Armstrong v. So (1978), 7 C.C.L.T. 164. Mr. Armstrong was unfortunate enough to have been involved in two accidents, that amongst other things weakened his leg such that in the ensuing months it had given way on a number of occasions. On the last occasion, Mr. Armstrong was badly hurt when his leg gave way while climbing a ladder to a "substantial height." While applauding Mr. Armstrong’s efforts to return to work, Justice Southey concluded that "he acted without reasonable regard for his own safety..." He characterized the plaintiff’s negligence as a novus actus interveniens that relieved the tortfeasor of responsibility for the additional injury.

In each of these cases the determining factor was the presence or absence of negligence. If the injured motorist’s subsequent injuries occurred because he failed to take reasonable care, the chain of causation was broken and he was left without recourse. If he was blameless, the chain of causation was unbroken, and his subsequent injuries were attributed to the initial incident.

In addition to these cases, I cite the decision of Arbitrator Draper in Nelson and Canadian General Insurance Company, (OIC A-006686, July 19, 1995). Mr. Nelson had injured his knee in a car accident. Subsequent falls caused by weakness in the knee exacerbated the knee condition. Arbitrator Draper concluded that the accident was the indirect cause of his injury.

The Insurer conceded during argument that if Mrs. Gauthier had aggravated the original injury to the patella it would be responsible for any ongoing disability, but argued that because the fall caused new injury, it was not responsible. The Insurer’s argument is inconsistent with the outcome in Goldhawke. In addition, I can find no logical reason to distinguish between incidents that merely exacerbate previous symptoms, and those that cause new injury. If the injuries sustained in the motor vehicle accident make the person more susceptible to further injury, and that unhappy consequence comes to pass, the subsequent injury can fairly be said to have been "caused" by the motor vehicle accident, unless the insured person’s conduct was unreasonable and materially increased the risk of further injury.

Mrs. Gauthier fell while mounting the stairs from her basement. At the time, her laundry and storage facilities were located in the basement, and she had little choice but to use the stairs on occasion. Climbing stairs is a normal and everyday activity that is scarcely avoidable. In this instance there is no evidence to suggest that Mrs. Gauthier was acting carelessly or that she was failing to take due care as she climbed the stairs.

I find that the injury sustained in the fall on the stairs was caused by the accident and hence compensable by the Insurer.

I conclude that Mrs. Gauthier qualified for IRBs 104 weeks after the onset of her disability and hence the Insurer is bound to make her an LECB offer.

Supplementary Medical and Rehabilitation Benefits

(i) Premiums for extended health care plan

While Mrs. Gauthier was working at the seniors residence, she paid premiums towards an extended health care plan arranged by her employer. After the motor vehicle accident the Insurer made the premium payments on her behalf, but when it terminated IRBs it stopped paying the premiums. Mrs. Gauthier has not continued to make the premium payments herself.

Mrs. Gauthier seeks an order directing the Insurer to pay the outstanding premiums. She asserts the claim under the catch-all provision of the supplementary medical or rehabilitation sections of the Schedule, arguing that the extended health care plan is a "good" within the meaning of the phrase "other goods and services." Mr. Besunder was unable to point to any precedent in support of this type of claim.

If the Insurer is paying significant amounts under the supplementary medical and rehabilitation coverages in the motor vehicle policy, it may be in its interests to make the premium payments so that it can position itself as a "second payer," but I do not believe that it is contractually bound to do so.

I agree with the Applicant's suggestion that the Schedule is to be read liberally, and in such a way as to maximize the insured person's rehabilitation, but I do not accept the submission that the Insurer is required to maintain the payments on a collateral insurance policy. The other goods and services" sub-section must be read in context. The goods and services that are enumerated in the sub-sections that precede the catch-all section, refer to treatments, medications or devices used by the insured person to facilitate her recuperation or rehabilitation. Payment of insurance premiums is different in kind. It is more akin to a pecuniary loss that is not covered by the Schedule.

(ii) Massage therapy

Most of the evidence concerning physical therapy related to physiotherapy rather than massage therapy. Mrs. Gauthier testified that after the motor vehicle accident she participated regularly in physiotherapy sessions. She stated that following these sessions she felt stronger and better able to cope. Early in 1996, her request for further physiotherapy treatment was subjected to a DAC assessment. In accordance with the DAC's recommendations, the Insurer agreed to fund a few more physiotherapy sessions, and a short course of massage therapy. Mrs. Gauthier saved the treatments until the fall when she thought she would need them more.

There are a number of short notes from Dr. Sattarian and Dr. Jyu dated after her last treatment that support the need for periodic physiotherapy treatment, but none refer to the need for further massage therapy. The only mention of further massage therapy is in the future care cost analysis prepared by Lynn Munroe. Ms. Munroe is a registered nurse, however it does not appear that she performed a medical examination. In my view the evidence falls short of establishing that the massage therapy is reasonable and necessary. This claim is denied.

There is evidence that Mrs. Gauthier is continuing to lose muscle mass in her leg and the parties may wish to address the need for further physiotherapy and a supervised exercise program.

(iii) TENS machine

Mrs. Gauthier testified that the use of a TENS machine offered her some temporary relief. Dr. Becker authored a very brief addendum to the MED DAC report in which he stated that although the purchase of a TENS machine was reasonable, it was not necessary. He suggested that she had reached "maximum recovery with respect to the TENS issue." I interpret Dr. Becker’s report as referring to the therapeutic rather than the analgesic value of the treatment. In contrast, Dr. Jyu included a paragraph in his letter of January 7, 1997 supporting the use of a TENS machine for analgesic purposes.

The cost of the machine is approximately $450. Pain management will be an ongoing issue for Mrs. Gauthier. The use of this machine helps control the pain at a modest price. This claim is allowed.

(iv) Three pairs of stretch pants per year

Mrs. Gauthier testified that she finds jeans constrict her knee and are uncomfortable. She testified that she now generally wears stretch pants when she goes out and sweat pants around the house. She has asked the Insurer to pay for three pairs of stretch pants per year. Mrs. Gauthier would have to periodically replace any pants that she wears, irrespective of her condition. The cost of the stretch pants is comparable to the cost of jeans. The accident has not materially increased her clothing costs. This claim is denied.

(v) House cleaning and carpet cleaning

Mrs. Gauthier testified that prior to the accident she kept her house meticulously clean. Her husband confirmed this evidence. Both referred specifically to her habit of vacuuming the carpets daily because of the children's asthma, and her drive to keep the windows and glass doors free of fingerprints and smudges. The Insurer did not challenge Mrs. Gauthier's pre-accident routines and I accept her evidence and that of her husband.

The Insurer paid for regular housekeeping until early 1996.

In January 1996, the Insurer arranged for Toronto Occupational Therapy Associates (TOTA) to conduct an in-home assessment. Mrs. Gauthier reported that the principle barriers to completing her housework were: difficulty with stairs, difficulty crouching and kneeling, and difficulty with sustained standing or walking. The assessors recommended a number of devices such as long handled brushes, and bi-weekly assistance for 8 weeks. The TOTA staff conducted a reassessment in March. They reported that there had been little change in Mrs. Gauthier's level of function, but they indicated that she resisted using the cleaning aids and maintained her demand that the Insurer should pay for a cleaner.

The MED DAC process included a functional capacity assessment. An explicit comment on housekeeping is outside of a MED DAC's authority, but the assessors noted that her tested tolerance levels suggested she might have some trouble with household tasks.

Dr. Malcolm was asked if Mrs. Gauthier was "able to substantially complete her household activities." He replied that she continued to suffer residual disability in her knee but that he did not believe that she was substantially disabled from household activities. This answer is not terribly helpful in the context of a demand for housekeeping assistance, where the test is whether the assistance is reasonably required, not whether she is "substantially disabled." His observations that she will find stair climbing, crouching, kneeling, and sustained standing, problematic is more useful.

Dr. Sattarian’s medico-legal report dated August 24, 1998, includes a brief paragraph suggesting that Mrs. Gauthier has trouble with tasks such as vacuuming and mopping floors and that she would benefit from assistance. He indicates that this will reduce the pressure on her knee and prevent aggravation of her symptoms.

When Ms. Munroe visited Mrs. Gauthier’s house in the summer of 1999, to prepare her future care costs analysis, she noted that the house was in need of a thorough cleaning. She reported that Mrs. Gauthier told her that the eldest daughter was doing most of the cleaning. Based upon the evidence of the family members at the hearing, including the daughter, it would appear that this is a bit of an overstatement. The daughter and the son help out to some extent, but Mrs. Gauthier still does most of the housework. The family members did support Mrs. Gauthier’s evidence that the house is no longer kept as clean as it was before and that after Mrs. Gauthier finishes housework she is visibly tired and in pain.

Ms. Munroe has recommended 8 hours of assistance bi-weekly.

Given the general acceptance that Mrs. Gauthier cannot tolerate kneeling and crouching, and has difficulty with sustained standing, it is apparent that some assistance is reasonable and necessary. Even taking account of the fact that the authors of the TOTA report believed that Mrs. Gauthier had resisted taking on tasks she was capable of doing, I fail to see how they could on the one hand accept that she has trouble crouching, kneeling and standing, and on the other hand have suggested that all assistance be withdrawn after 8 weeks.

I am satisfied that some assistance is appropriate.

In considering the amount of assistance, I note that Mrs. Gauthier's statements to Ms. Munroe appeared to paint a bleaker picture than is actually the case. In addition, I note that the Insurer has now agreed to move the laundry facilities to the main floor, which will reduce some of the stair climbing.

I find that 6 hours of assistance every 2 weeks is reasonable. The past loss is to be paid at the hourly rate charged by Molly Maid at the applicable times. In addition, I find that Mrs. Gauthier is entitled to $305.90 per annum representing the cost of periodic carpet cleaning.

(vi) Painting and wall papering

Mrs. Gauthier has claimed $1,380 representing the annual cost of replacing her contribution toward painting and wall papering. However, Mr. Gauthier testified that prior to the accident he did virtually all of this work, and that at most his wife did a little of the clean up. This claim is denied.

(vii) Outdoor maintenance and gardening

Mrs. Gauthier and her family testified that after the accident, Mr. Gauthier and the boys took over the yard work and snow shovelling duties that Mrs. Gauthier had undertaken before the accident, because she found these activities painful.

The claim for yard maintenance was for 39 hours per year at $6.40 per hour. During submissions, the Insurer’s counsel conceded that the number of hours and the hourly rate were appropriate, but he noted that the evidence suggested that prior to the accident Mrs. Gauthier shared the yard duties with her husband. The Applicant’s counsel agreed, and reduced the demand by half. The Insurer maintained that the medical evidence did not support the claim.

Dr. Satarrian does not address this issue directly. However, his general comments that sustained walking and applying a load to the knee in the flexed position are germane. Dr. Malcolm testified that the principle difficulty with grass cutting or snow shovelling would simply be the walking.

I am satisfied that this activity, like housekeeping, is difficult for Mrs. Gauthier and that it leaves her tired and sore. However, it would appear that she is doing some outside yard work as a hobby. I refer to the evidence concerning an attempt to plant a small tree at the cottage, and to the reference in Lynn Munroe’s report recommending that the Insurer purchase some light weight garden tools so that Mrs. Gauthier could pursue her hobby. I reduce the claim by five hours (approximately 25%), and award Mrs. Gauthier $92.80 per annum on account of grass cutting.

With respect to the snow shovelling, I accept that approximately 20 hours per year is spent on this chore. The family members evidence supports a finding that prior to the accident most of this work was done by Mr. Gauthier. I find that Mrs. Gauthier is entitled to $35 per annum representing approximately 5 hours at the requested rate of $6.85 per hour.

I have not allowed any amount for hosing down the driveway. There was no direct medical evidence on this point, and the evidence indicated that this chore was only undertaken a few times a year and was not physically demanding. In fact, Mrs. Gauthier’s daughter testified that she had seen her mother hose down the driveway a few times since the accident.

Special Award:

At the opening of the hearing, counsel for the Applicant indicated that he was seeking a special award on the basis that the IRBs had been improperly terminated and not reinstated until an hour before the commencement of the hearing. In addition, he argued that a special award was owing on the grounds that the Insurer had unreasonably refused to pay for a number of supplementary medical benefits and house renovations until the eve of the hearing, and some benefits such as housekeeping remained outstanding.

When the hearing resumed, counsel for the Applicant indicated that the settlement funds for the issues settled at the commencement of the hearing in July had not been delivered until the end of September and that he intended to argue that this additional delay justified a further special award.

With respect to the demand based upon the failure to pay the supplementary medical benefits or the cost of renovations, a formal demand for these benefits was not made until after the Insurer had already taken the position that Mrs. Gauthier's ongoing disabilities were unrelated to the accident. I have decided this point in the Applicant's favour, but I do not think that the Insurer's position was an unreasonable one.

With respect to the improper termination of the IRBs, a little more background is necessary. Mrs. Gauthier saw Dr. Welsh for an IME on January 11, 1996. On January 17, 1996, before anyone had received a copy of Dr. Welsh's report, Mrs. Gauthier wrote to the adjuster asking that he arrange another examination because she did not believe that Dr. Welsh had spent enough time with her to truly understand her condition. On January 24th the adjuster called Mrs. Gauthier to discuss her complaint. His file note indicates that he told Mrs. Gauthier that in light of her concern he would arrange for a DAC assessment. Later that day he received a faxed copy of Dr. Welsh’s report and on January 29th he wrote to Dr. Malcolm asking him to conduct a DAC assessment.

Mrs. Gauthier testified that the adjuster never mentioned a DAC assessment to her. I reject this evidence. Mrs. Gauthier was testifying about a conversation that had taken place three years earlier and I find it highly unlikely, that at the time of the conversation, she would have appreciated the distinction between a further IME and a DAC assessment. I prefer the evidence of the adjuster on this point which is consistent with his note and the letter to Dr. Malcolm. I find that the Insurer believed it was in a position to arrange a DAC and asked Dr. Malcolm to examine Mrs. Gauthier in his capacity as a DAC.

When the adjuster terminated benefits he thought that he had a DAC report that justified taking this step. However, because the Insurer had not delivered a termination notice after receipt of Dr. Welsh’s report, the DAC provisions did not come into play, and Dr. Malcolm’s report was simply another IME, and the Insurer was not authorized to terminate benefits when it did so on the second anniversary of the accident. However, I note that this error was not pointed out to the Insurer until shortly before the hearing, and the matter was settled shortly thereafter.

It is a fair comment to say that insurers are expected to know the Schedule, and they ought not to rely upon the applicant’s counsel to point out their mistakes. At the same time, it would be inappropriate for an arbitrator with the benefit of hindsight to demand too high a standard. As I noted in Cripps and AXA-2 Insurance (Canada) (A-013360, as approved in McConachie and GAN Canada Appeal Order P97-00069, October 28, 1998) the standard is not one of perfection. In this instance, I am satisfied that the mistake was understandable and that a special award is not appropriate.

I am more concerned by the Insurer's failure to enact the settlement terms within a reasonable time. The claims manager who was responsible for the file was present on the first day of the hearing. The actual instructions to settle had come from another individual, but he was aware of the details, which were confirmed by way of a letter delivered by the Insurer's counsel shortly after the hearing. The witness explained the initial delay by indicating that after getting the letter, he did not think the amounts agreed upon were in keeping with the weekly benefits that Mrs. Gauthier had been paid prior to termination. He attempted to speak with counsel to straighten out the confusion but summer holidays intervened and he did not get the matter straightened out until the end of August. As noted above, the payment was not made until the end of September. He explained this later delay on the fact that the amounts involved were beyond his authority, and it took him some time to get the cheque issued.

I do not think that either excuse can justify the late payment of the benefit.

First, the witness acknowledged that the Schedule stipulates that benefits are owing 14 days after an application is made. He then agreed that settlement funds should be treated no differently. That being the case, the settlement funds were overdue by the end of July.

Was there a reasonable excuse for the two month delay until they were paid at the end of September? I do not believe so.

The witness admitted that he did not intend to resile from the agreement and that he only wanted to satisfy himself. If he was not going to attempt to set the agreement aside, there was no reason to not seeking the funds immediately. He ought to have asked for them immediately. He could then have sought clarification on his own time, not the Applicant's.

Nor do I accept the argument that the delay is justified because the amount of the settlement funds were beyond his authority. Another manager who presumably had the authority, had already authorized the settlement. There should have been no delay in delivering the settlement funds.

In considering the size of the special award, I note the payments were only overdue by two months. I award Mrs. Gauthier a special award of $1,750 being approximately 5% of the settlement.

EXPENSES:

I may be spoken to on the issue of expenses if necessary.

June 21, 2000

Stewart McMahon Arbitrator

Date