Pius Boniface v. Liberty Mutual Insurance Company, 2000 ONFSCDRS 125

Financial Services Commission of Ontario

Neutral Citation: 2000 ONFSCDRS 125 FSCO A97-002106

Between: Pius Boniface, Applicant and Liberty Mutual Insurance Company, Insurer

Decision on a Motion for Interim Benefits

Before: Judith Killoran Heard: April 6, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on April 14, 2000. Appearances: Allan W. Chapnik for Mr. Boniface Pamela Brownlee for Liberty Mutual Insurance Company

Issues:

The Applicant, Pius Boniface, was involved in three motor vehicle accidents on June 30, 1995, April 12, 1996 and September 15, 1996, respectively. He applied for and received statutory accident benefits from Liberty Mutual Insurance Company ("Liberty Mutual"), payable under the Schedule.¹ Liberty Mutual terminated weekly income replacement benefits on March 16, 1997.

The parties were unable to resolve their disputes through mediation, and Mr. Boniface applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Insurance Act").

Mr. Boniface has brought a motion pursuant to section 65 of the Dispute Resolution Practice Code — Third Edition for interim benefits to be paid to him pending the resolution of his dispute with Liberty Mutual.

The issues on this motion are:

1. Is Mr. Boniface entitled to interim benefits pursuant to subsection 279(4.1) of the Insurance Act?

2. Is Liberty Mutual liable to pay a special award under subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Boniface?

Mr. Boniface also claims interest on any amounts owing and his expenses incurred on this motion.

Result:

1. Liberty Mutual shall pay Mr. Boniface interim benefits in the amount of $313.77 per week from March 16, 1997 ongoing, subject to future compliance with section 64 of the Schedule, or any order of an arbitrator.

2. Liberty Mutual shall pay interest on any outstanding income replacement benefits, in accordance with section 68 of the Schedule.

3. The issues of a special award and arbitration expenses are reserved to the arbitrator hearing the merits of the application.

EVIDENCE AND ANALYSIS:

Background

Mr. Boniface was involved in three motor vehicle accidents on June 30, 1995, April 12, 1996 and September 15, 1996, respectively. Liberty paid income replacement benefits in the amount of $313.77 per week based on injuries sustained by Mr. Boniface in the motor vehicle accident of June 30, 1995. Following his accident of April 12, 1996, Mr. Boniface applied for income replacement benefits as a result of the injuries sustained from that accident. Liberty Mutual determined that Mr. Boniface's original injuries had been exacerbated as a result of the accident but continued to pay income replacement benefits based on the June 30, 1995 accident.

By letter dated August 16, 1996, Liberty Mutual advised Mr. Boniface that it would terminate his income replacement benefits effective on September 14, 1996 unless he elected to be assessed by a disability DAC. By letter dated August 23, 1996, Mr. Boniface requested the disability DAC assessment and enclosed an executed OCF-14. By letter dated August 28, 1996, Liberty Mutual referred the matter to the DAC. The referral letter stated that the assessment was in respect of the June 30, 1995 accident.

Following his motor vehicle accident of September 15, 1996, Mr. Boniface applied for income replacement benefits as a result of injuries sustained in that accident. By letter dated December 19, 1996, Liberty Mutual advised that the motor vehicle accident of September 15, 1996 had exacerbated Mr. Boniface's injuries from his previous accidents but it would continue to pay income replacement benefits based on the motor vehicle accident of June 30, 1995.

Interim Benefits

On June 15, 2000, I issued an order in this case, with reasons to follow. My order stated:

1. Liberty Mutual shall pay Mr. Boniface interim benefits in the amount of $313.77 per week from March 16, 1997 ongoing, subject to future compliance with section 64 or any order of an arbitrator.

2. Liberty Mutual shall pay interest on any outstanding income replacement benefits, in accordance with section 68 of the Schedule.

3. The issues of a special award and arbitration expenses are reserved to the arbitrator hearing the merits of the application.

An arbitrator's authority to make interim orders is found in subsection 279(4.1) of the Insurance Act which provides as follows: "The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator." This is a discretionary power where the burden of proof rests with the applicant.

In Ioannidis and Canadian General Insurance Company², Arbitrator Manji specified: "The following criteria have been identified in exercising the discretion in subsection 279(4.1) of the Insurance Act:

(1) The merits of the case for entitlement.

(2) The existence of an element of necessity or urgency, or

(3) A blatant disregard by the insurer of the Schedule or the Act."

The criteria for the exercise of authority in subsection 279(4.1) of the Insurance Act have been considered in a number of other arbitration decisions. In the cases of Osbourne and Allstate Insurance Company and York Fire & Casualty Company³, Lucas and Dominion of Canada General Insurance Company⁴ and Malabanan and Canadian General Insurance Company⁵, the arbitrators have ruled that the standard of proof required for an interim order for the payment of benefits is that the applicant establish a prima facie case for entitlement to benefits.

I agree with those arbitration decisions which have ruled that one threshold criterion for an interim order is that the insured person establish a prima facie case for entitlement. As expressed by Arbitrator Manji in Malabanan: 'That is, the applicant must produce evidence, which if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement". It is in keeping with the summary nature of the procedure on an application for an interim order that the standard of proof be considerably lower than in circumstances where an applicant has an opportunity to present their entire case at a full hearing with all the relevant evidence.

I have relied on the criteria and principles outlined by Arbitrator Manji in Ioannidis when considering the evidence on this motion for interim benefits. I will look at the third principle first.

Blatant Disregard of the Schedule or the Insurance Act

Subsection 64(1) of the Schedule provides that an insurer shall not stop payment of weekly income replacement benefits "on the ground that the insured person no longer suffers from a disability as a result of the accident in respect of which weekly benefits are paid, except in accordance with this section."

In Sweete and Jevco Insurance Company⁶, the arbitrator relied, in part, on the insurer's violation of its obligations under section 64 of the Schedule to make an interim order for payment of benefits. In Fortney and Lombard General Insurance Company of Canada⁷, Coutu and Wawanesa Mutual Insurance Company⁸, and Simpson and Trafalgar Insurance Company of Canada⁹, the arbitrators relied on an egregious breach of section 64 alone to award interim benefits.

The stoppage provisions of the Schedule provide a detailed, mandatory code about the steps to be followed if income replacement benefits are to be terminated by the insurer. Assessments by designated assessment centres were introduced into the statutory benefits regime to provide opinions on specific issues, such as whether a person continues to be disabled as a result of a particular accident. The assessment process was designed to include the input of relevant information from both the insurer and the insured.

Guidelines for Designated Disability Assessment Centres ('"Guidelines ") were issued in January 1995 by the Accident Benefits Advisory Committee, appointed under section 1 of the Insurance Act. Subsection 63(2) of the Schedule provides that such Guidelines shall be used by designated assessment centres in conducting assessments. During the intake stage of the process, item 8 specifies:

Confirm Essential Duties: Confirm with the claimant his or her essential duties. To carry out a successful disability assessment, DACs must have a clear description of the claimant's essential tasks. This information is provided as part of the referral package. Where theses are not defined completely or are in dispute the DAC is responsible for undertaking the analysis necessary to clarify outstanding issues before starting the assessment stage of the process. DACs should have the appropriate professionals do a task analysis. The applicable disability tests are found on the Designated Assessment Referral and Summary Report (OCF-11) form.

The disability DAC was conducted by Dr. Carlan Stants, a chiropractor, and Dr. D. Prendergast, a psychologist. Dr. Stants prepared a report dated December 10, 1996, in which he made the following statements:

This letter represents my final report in this matter.

I assessed Mr. Boniface on November 20, 1996 for injuries reportedly sustained because of two motor vehicle accidents on April 13, 1996 [sic] and September 15, 1996. Mr. Boniface was previously assessed in this facility in March, 1996 for injuries sustained in a motor vehicle accident on June 30, 1995. The purposes of this prior assessment was to determine the reasonableness and necessity of medical/rehabilitation benefits.¹⁰

Dr. Stants listed the following documentation as being provided by Liberty Mutual and Mr. Boniface:

Health Practitioner's Certificate dated July 6, 1995 - Dr. R. Beharry

Health Practitioner's Certificate dated September 18, 1995 - Dr. R. Beharry

Application for Accident Benefits dated July 17, 1995 - P. Boniface

Employer's Confirmation of Income dated September 28, 1995 - G. Parsons, Human Resources

Occupational Therapy Home Assessment Report dated October 12, 1995 - G. Salesman, Associative Rehabilitation Inc.

Letter dated October 17, 1995 - A. Adamek, Canadian Plastics Training Centre.¹¹

When Dr. Stants lists the history of the accidents he mentions the April 13, 1996 [sic] and the September 15, 1996 accidents with no reference to the June 30, 1995 accident. He relates that although Mr. Boniface indicated that he worked as an injection moulding machine operator, Ms. Gloria Parsons, an employee of Standard Products, specifies in a report of March 19, 1996 that Mr. Boniface had been employed as general help only. Mr. Boniface explained to Dr. Stants that while his prior work experience involved making plastics products for automobiles, he had returned to school at the time of the June 30, 1995 accident and was completing a certificate program in Technical Injection Moulding.

Dr. Stants classified the job of injection moulding machine operator as a light physical demands level job relying on the definition in the dictionary of occupational titles. He commented:

From a functional perspective, Mr. Boniface, subjectively did not meet the criteria for performing a light job as Injection Moulding Machine Operator. It was felt that Mr. Boniface was deliberately self limiting his capabilities and is capable of a great deal more than he chose to demonstrate ... It is our opinion that he is physically capable of handling light physical demands level activities and should be encouraged to return to work as soon as possible.¹²

Although Dr. Stants' conclusion was: "I would not deem him to be substantially disabled from a physical perspective from performing his pre-accident activities of daily living or occupation as an injection moulding machine operator,"¹³ he went on to say, "The overall physical prognosis for Mr. Boniface is poor ... I believe that his long-term outcome will be determined by his ability to deal with the psychosocial issues."¹⁴

There is no description in Dr. Stants' report of the essential tasks of Mr. Boniface's pre-accident employment and Dr. Stants leaves open the question of whether or not Mr. Boniface was disabled due to psychological reasons.

Dr. Prendergast prepared a report dated November 28, 1996 in which the following statements are made:

... there is something in his presentation which suggests a more serious psychological problem which may, although I cannot state categorically, predate his accidents.

... I am hard pressed to determine how his September accident, a relatively minor one, would have exacerbated his current state, unless there was some pre-existing psychological disability.

Based on the above, it is my strong opinion that Mr. Boniface does require and should be supported in additional psychological services.¹⁵

Dr. Prendergast's report does not specify that it was a final report nor does his report specify upon which accidents he was providing an opinion. Dr. Prendergast's report does not refer to the essential tasks of Mr. Boniface's pre-accident employment nor does his report provide an opinion as to whether Mr. Boniface was disabled from performing his pre-accident employment.

The Guidelines specify that a summary of the findings of the assessment must respond directly to the questions of whether the claimant is still disabled, and whether the disability is the result of the automobile accident for which benefits are being paid.

There were a number of defects in the DAC process. For example, it appears that Dr. Stants, the chiropractor who participated in the DAC, analyzed the wrong accident. As well, Dr. Stants did not conduct any task analysis. It is unclear to which accident Dr. Prendergast is referring. Dr. Prendergast does not conduct or refer to a task analysis and makes no findings about disability. Also, Mr. Boniface's income replacement benefits were terminated before the DAC report was received. Liberty Mutual terminated Mr. Boniface's income replacement benefits effective March 16, 1997. The DAC report was forwarded to Mr. Boniface's counsel on April 24, 1997.

I find that there were such serious flaws with the DAC process that Mr. Boniface's benefits should be reinstated until a proper DAC has been conducted. The requirements of section 64, the stoppage of benefits provision in the Schedule, have not been met. In the event that I have erred in this conclusion, I have considered whether the applicant has also met the threshold criteria for interim benefits.

Merits of the Case

In my view, an interim order for benefits is also appropriate where there has been no breach of the Schedule but the following threshold criteria have been met: (i) where the applicant has put forward a prima facie case for entitlement; and (ii) where the applicant has demonstrated some need or necessity or urgency for the interim order pending the final order.

A Work Capacity Evaluation arranged by the Insurer with Dr. T. Schapira, occupational medicine physician, dated July 18, 1996 reported as follows:

Mr. Boniface is able to return to his previous activities of daily living now without any home modification or physical aids. Furthermore, he is able to return to his previous occupation now without any physical aids or work accommodation.

There is no physical reason why Mr. Boniface should not be working now. If he does not return to some form of gainful employment now, then one can state that he is standing in the way of his own rehabilitation.¹⁶

On the other hand, on September 16, 1997, ACT Health Group Corporation Inc. conducted a Functional Capacity Assessment with Mr. Boniface, at the request of the Insurer. The findings were as follows:

According to physical job demands identified in the reviewed documentation, Mr. Boniface's job as an Injection Moulding Machine Operator and General Factory Helper is classified within the Heavy industrial work range. Mr. Boniface's demonstrated abilities do not meet these demands. However, it should be noted that according to the National Occupational Classification, the job of an Injection Moulding Machine Operator is classified within the light industrial work range. Due to the discrepancy of the information and the absence of a Job Site Assessment which objectively measures the job demands, this therapist cannot comment further regarding Mr. Boniface's present abilities in relation to his pre-injury level of functioning.¹⁷

As well, a Functional Capacity Evaluation ("FCE") performed by Atila Balaban (physiologist) and Marvin Shedletzky (chiropractor) dated July 27, 1999 reported in part as follows:

Mr. Boniface's performance was consistent throughout the evaluation, as outlined above. In addition, his performance was consistent with biomechanical limitation. Changes in body mechanics observed during the evaluation were consistent with the compensatory changes observed prior to functional testing. Mr. Boniface's performance during this evaluation was consistent with the following functional limitations:

• decreased strength and endurance capacity of the lower back musculature resulting in muscle imbalances and decreased functional stability of the lower back

• decreased strength and endurance of the right shoulder musculature resulting in muscle imbalances particularly between left and right upper trapezius musculature¹⁸

• general deconditioning

The FCE also stated:

Mr. Boniface's primary pain reports during the evaluation were of low back pain and right shoulder pain; he also complained of fatigue. His pain behaviour during the evaluation was appropriate (as documented above). Changes in body mechanics coincided with pain reports; the degree of both of these parameters increased with increasing load especially during the lifting tasks. It was apparent that Mr. Boniface was pain-limited during a few tasks, however, this was clearly pain-limitation and not self-limitation as the pain reports were consistent with the observed compensatory changes and changes in body mechanics.¹⁹

The FCE concluded that: "His demonstrated functional abilities do not match the essential job requirements of a plastics technician."²⁰

An insurer's examination with Dr. H. Schutz, a neurologist, determined in a report dated February 2, 1998 that:

To reiterate, I do not believe that Mr. Boniface's present complaints of urinary incontinence are related to soft tissue injuries which he sustained in the motor vehicle accident of September 15, 1996. Furthermore, the incontinence is not related to the series of three motor vehicle accidents which occurred on June 1995, April 1996 and September 1996 ... In summary, I believe this young man is physically fit to return to all of his activities including work if he so wishes. It is to his considerable benefit to reintegrate himself into working society at the earliest possible date.²¹

However, a report of Kent Bowman (rehabilitation consultant) dated July 28, 1999, stated in part as follows:

After testing, the claimant was examined by Dr. Sidney B. Radomski M.D., FRSC, Urological Surgeon, Toronto Western Hospital, who reported (July 17, 1997) that 'This young man has urinary incontinence. Most recent urodynamics and previous urodynamics now confirm that he has both bladder instability and a fixed urethra with both urge and stress incontinence. This condition is most likely related to his back trauma from his car accidents ... At present he also requires diapers.'²²

In a report prepared for the Applicant dated March 6, 2000, Dr. M. Mamelak, psychiatrist, who has been meeting with Mr. Boniface regularly since November 1996, states: "In my opinion, Mr. Boniface's prognosis is poor. He is substantially disabled from doing the duties of his regular occupation and indeed I cannot imagine that he is employable in any capacity. Pain, impaired cognition and poor bladder control make it very difficult for him to function in any normal manner."²³

Dr. Brian S. Kirsh, who specializes in pain medicine and psychiatry, prepared a report for the Applicant dated March 6, 2000. In his report, Dr. Kirsh commented: "It is my opinion that Mr. Boniface's experience of pain is very real. From my interview with him and from the documents of the Medical Brief, I have no reason to suspect that he is fabricating these symptoms consciously for purposes of malingering or subconsciously in order to gain the sick role."²⁴

Dr. Kirsh also stated: "I believe that Mr. Boniface cannot function properly to hold down any kind of employment, even one that is light sedentary as he is overwhelmed by his Pain Disorder. This disability has been present continuously from the accident of June 30, 1995 and continues to the present."²⁵

Although there is some disagreement among the medical reports about the nature and extent of Mr. Boniface's disability, I find that Mr. Boniface has produced sufficient medical evidence to establish a strong prima facie case for entitlement to benefits.

Urgency/Need:

Mr. Boniface's only source of income since the termination of benefits is monthly social assistance payments from the Regional Municipality of Peel in the amount of $520.00. In his affidavit, Mr. Boniface claims that he has lived in virtual poverty since the termination of benefits. I note that Mr. Boniface's benefits were terminated effective March 16, 1997 which means that he has been denied benefits for more than three years. He is suffering serious financial hardship. Therefore, I find sufficient evidence of necessity or urgency to justify an interim order.

I find that although Mr. Boniface is entitled to a reinstatement of his benefits solely on the basis of the deficiencies in the DAC process and report, he also meets the threshold criteria for interim benefits, on the basis of a prima facie case and urgency or need.

SPECIAL AWARD:

The issue of a special award is reserved to the arbitrator hearing the main application. I consider it more appropriate for the arbitrator hearing the merits to determine the issue of a special award. By its very nature, an interim benefits hearing is not as extensive as a final hearing where there is more opportunity for evidence to be filed and witnesses to be examined and cross-examined.

It is important that the question of a special award be considered from the perspective of the entire circumstances of the case. A fuller inquiry into the reasonableness of the Insurer's conduct in this matter is justified.

EXPENSES:

The issue of Mr. Boniface's expenses of this motion may be addressed by the hearing arbitrator.

July 6, 2000

Judith Killoran Arbitrator

Neutral Citation: 2000 ONFSCDRS 125 FSCO A97-002106

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN: PIUS BONIFACE Applicant and LIBERTY MUTUAL INSURANCE 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. Liberty Mutual shall pay Mr. Boniface interim benefits in the amount of $313.77 per week from March 16, 1997 ongoing, subject to future compliance with section 64 or any order of an arbitrator.

2. Liberty Mutual shall pay interest on any outstanding income replacement benefits, in accordance with section 68 of the Schedule.

3. The issues of a special award and arbitration expenses are reserved to the arbitrator hearing the merits of the application.

June 15, 2000

Judith Killoran Arbitrator

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, 463/96 and 304/98.
2. 2(OIC A97-001551, December 21, 1997)
3. 3(OIC A-009110, November 18, 1994)
4. 4(OIC A-009670, March 23, 1995)
5. 5(OIC A-009670, March 23, 1995)
6. 6(OIC A96-000614, October 24, 1996)
7. 7(OIC A91-00553, December 24, 1991)
8. 8(OIC A91-001916, June 5, 1998)
9. 9(FSCO A98-000215, July 16, 1998)
10. 10(Exhibit 1, Tab M, Dr. Stants' Report, pg.1)
11. 11Supra, note 10
12. 12Exhibit 1, Tab M, Dr. Stants' Report, pg.13
13. 13Supra, note 12, pg.14
14. 14Supra, note 12, pg.15
15. 15Exhibit 1, Tab M, Dr. Prendergast's Report, pg.7
16. 16Exhibit 1, Tab B, Dr. Schapira's Report, pg.28
17. 17Exhibit 1, Tab 13, pg.6
18. 18Exhibit 1, Tab 12, pg.11
19. 19Exhibit 1, Tab 12, pg.12
20. 20Exhibit 1, Tab 12, pg.14
21. 21Exhibit 1, Tab 9, pg.8
22. 22Exhibit 1, Tab 13, pg.6
23. 23Exhibit 4, Tab 32, pg.1
24. 24Exhibit 4, Tab 33, pg.7
25. 25Exhibit 4, Tab 33, pg.9