M. D. v. Halifax Insurance Company, 2000 ONFSCDRS 139

FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2000 ONFSCDRS 139

FSCO A99-000690

BETWEEN:

M. D. Applicant

and

HALIFAX INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: William J. Renahan

Heard: July 5, 2000, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Roland Spiegel, agent, for M. D. Theodore P. Charney, Barrister and Solicitor, for Halifax Insurance

Issues:

The Applicant, M. D., was injured in a motor vehicle accident on May 25, 1998. She was 24 years old. She applied for and received statutory accident benefits from Halifax Insurance Company ("Halifax"), payable under the Schedule.¹ Halifax terminated weekly income replacement benefits on July 30, 1998. The parties were unable to resolve their disputes through mediation, and M. D. applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue in this hearing is:

1. Should the application for arbitration be dismissed or stayed pending compliance by the Applicant with the pre-hearing production orders?

The issue in this hearing is:

2. Is the Applicant entitled to the cost of examinations pursuant to subsection 24(1) of the Schedule in the following amounts: $1,150 for a functional abilities evaluation; $950 for a psychological evaluation; $450 for a physiotherapy assessment; and $950 for a medical assessment?

Result:

1. The application for arbitration is dismissed.

EVIDENCE AND ANALYSIS:

Background:

M. D. was injured in a motor vehicle accident on May 25, 1998. Dr. E. A. Mastrangelo, her family doctor, treated her and referred her to a number of specialists. About three months after the accident, Ms. D asked Dr. Mastrangelo to refer her to DEAHY Medical Assessments Inc. ("DEAHY"). Dr. Mastrangelo made the referral and Ms. D underwent the assessments. Halifax refused to pay DEAHY's account.

The only witness at the hearing was Dr. Mastrangelo. I heard no explanation for Ms. D's absence at the hearing.

Preliminary issue:

At the opening of the hearing, Halifax asked that I dismiss the arbitration on the grounds that Ms. D failed to comply with production orders made at the pre-hearing of this case in January, 2000. Neither Ms. D or her counsel appeared at the pre-hearing, and the pre-hearing arbitrator could not contact either one by telephone. The pre-hearing arbitrator made the following order:

I order Ms. M D to produce the following relevant information on or before April 20, 2000:(emphasis in original)

1. The complete clinical notes and records of ACT Health Group, Deahy Medical Assessments, Inc.

2. The clinical notes and records of Dr. E. A. Mastrangelo from one year pre-accident forward.

3. A decoded list of services funded by the Ministry of Health (OHIP summary) from one year pre-accident forward.

4. Halifax satisfied me that the backup information to the assessments is a relevant matter for inquiry. Ms. M D must produce an itemized breakdown of each charge in the assessment showing the hourly rate of each health practitioner, the amount of time, the service provided, practitioner's name and qualifications, the practitioner's remuneration and outline of the basis for remuneration.

5. I find Halifax's request for information about whether the tortfeasor has paid or is willing to pay these assessments is relevant. Thus, Ms. M D must produce any undertaking she or her representatives have given to the tortfeasor respecting these expenses or information that the tortfeasor has offered to pay them.

The arbitrator invited the parties to contact him well in advance of the hearing if further issues arose. The parties did not contact him.

Ms. D only produced the OHIP record. Despite two written requests by Mr. Charney, Mr. Spiegel did not produce the documents Ms. D was ordered to produce.

This case is about the collection of DEAHY's account. The documents referred to in the order directly relate to proof of entitlement to and the amount of the account. All of the documents order to be produced were in the control of the Applicant and some of those documents were in the possession of DEAHY. Mr. Spiegel's mailing address is the same as that of DEAHY. On November 17, 1998, Ms. D signed a document authorizing DEAHY to act as her agent in the collection of the account and to disclose to the Insurer or its solicitor any clinical notes or records to assist DEAHY collect the account. I heard no rational explanation for the Applicant's failure to produce the documents which she was ordered to produce.

This is not a case where a party refuses to comply with his undertaking to produce a document. In such a case, it might be appropriate to infer that the party did not produce the document because it would not help his case. In this case, the Applicant has refused to comply with an order of this tribunal. It is unusual when a person seeking the assistance of a tribunal refuses to comply with its orders. In Ontario v. PaulMagder Furs Limited, 1991 CanLII 7053 (ON CA), [1991] 6 O.R. (3d) 188, Magder appealed from an order holding it in contempt of an order to close its stores on Sunday in compliance with the Retail Business Holidays Act, R.S.O. 1980, c. 453. The Court of Appeal adjourned the appeal until Magder purged its contempt by complying with the lower court's order. Brooke J.A. wrote:

In my opinion, it is an abuse of process to assert a right to be heard by the court and at the same time refuse to undertake to obey the order of the court so long as it remains in force. That is this case. Magder's disobedience from the beginning and now is such that it impedes the course of justice and impairs the ability of the court to enforce its orders. It is a general rule that a party in contempt will not be heard in the proceeding until the contempt is purged.

I find this quotation and the principles behind contempt proceedings helpful.

In Practice and Procedure Before Administrative Tribunals² the authors write:

The offence of contempt exists primarily as a necessary incident to the rule of law. It exists in order to protect society against threats to the administration of justice. Actions which undermine the ability to resolve disputes in the courts threaten the rule of law.

The object is always compliance and not punishment.

Subsection 23(1) of the Statutory Powers Procedure Act provides as follows:

A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

Mr. Charney agreed to proceed with the hearing despite the Applicant's non-compliance with the production orders but asked that I rule on the preliminary issue. I do not believe that Ms. D's failure to comply with production orders is grounds for an order dismissing the arbitration. It is grounds for an order staying the proceedings pending compliance with the production order.

Entitlement to costs of examinations:

Section 24 of the Schedule provides for entitlement to the cost of examinations as follows:

24. (1) The insurer shall pay for all reasonable expenses incurred by or on behalf of an insured person for the purpose of this Regulation in obtaining and attending an examination or assessment or in obtaining a certificate, report or treatment plan, including,

(a) fees charged by a person who conducts an examination or assessment or provides a certificate, report or treatment plan;

(b) fees charged by a designated assessment centre; and

(c) transportation expenses incurred in transporting the insured person to and from an examination or assessment, including transportation expenses for an aide or attendant.

Ms. D saw Dr. Mastrangelo the day after the accident complaining of total body stiffness. Dr. Mastrangelo noted that she had bruising on her neck, back and shoulders. He referred her to physiotherapy at ACT and to a neurologist and psychologist. Ms. D told Dr. Mastrangelo that the only thing that helped her was massage. About three months after the accident Halifax terminated income replacement benefits and Ms. D asked for a disability assessment at a Designated Assessment Centre ("DAC"). She also asked Dr. Mastrangelo to refer her to DEAHY for a medical and rehabilitation assessment. In September 1998, Ms. D underwent the disability assessment at the DAC. Also in September, Dr. Mastrangelo referred Ms. D to a psychiatrist. Dr. Mastrangelo signed DEAHY's referral forms in October 1998 and Ms. D was assessed by DEAHY on November 17 and 19, 1998.

Halifax argued that section 24 does not cover medical reports which are obtained for the purpose of litigation as they are not report or assessment expenses incurred "for the purpose of this Regulation." Halifax submitted that the timing of the request for referral and actual referral to DEAHY coincide with the termination of weekly benefits and the review of the unfavourable DAC report and therefore show that the DEAHY assessments were done for the purpose of litigation.

Halifax refused to pay further weekly benefits and rehabilitation and medical expenses nearly two years ago. At the time Ms. D ask for the medical/rehabilitation assessment at DEAHY, she was receiving physiotherapy treatment and in the process of being assessed for psychological treatment. Halifax had not denied physiotherapy or psychological treatment. Ms. D has not applied for mediation for denial of any benefit other than the costs of the DEAHY assessments. The only evidence I heard to explain Ms. D's request for a referral to DEAHY was Dr. Mastrangelo's testimony that someone suggested it to her. I am not satisfied that Ms. D ever intended to litigate a refusal to pay benefits and I am therefore not satisfied that Ms. D obtained the DEAHY assessments to use in litigation. Accordingly, I need not decide if section 24 applies to cover the cost of medical legal reports.

Section 24 provides that the expenses in obtaining an assessment are to be reasonable. I do not find that the expenses in obtaining the DEAHY assessments were reasonable for a number of reasons.

I do not know why Ms. D requested the DEAHY assessments. Dr. Mastrangelo testified that he did everything he could think of for Ms. D and that only massage seemed to help her. He testified that the only treatment DEAHY suggested which he had not tried was steroid injections. He made the referral because Ms. D asked him to. He did not know why she wanted to go to DEAHY other than someone had recommended it to her. He had not heard of DEAHY before and he did not know who the assessors were or what their qualifications were. He had no record that he reviewed the assessments with Ms. D. I heard no evidence that DEAHY provided or arranged for treatment and I find that DEAHY only did assessments. It did not provide or arrange treatment. Dr. Mastrangelo testified that he hoped that DEAHY would treat Ms. D and that he would not have referred Ms. D to DEAHY if he had known that it did not provide or arrange for treatment. Ms. D's request for the DEAHY assessments is the only reason advanced for the referral and she did not testify to explain her request. By itself, her request for assessments is not evidence that the assessments were reasonable. Dr. Mastrangelo did not use the DEAHY assessments. I find that the expense for the DEAHY assessments were not reasonable and Halifax need not pay for them.

Further, I examined the circumstances surrounding each assessment and find that each of the assessments was unnecessary when the referral was made. Following are the circumstances surrounding each assessment.

Functional abilities evaluation:

Ms. D underwent two functional capacity evaluations before she attended DEAHY. On June 29, 1998, she underwent an assessment arranged by Halifax. On September 24 and 25, 1998 she underwent a second functional capacity assessment as part of the DAC assessment. The DAC assessors found that the results did not demonstrate Ms. D's ability because of inconsistencies and submaximal effort. Dr. Mastrangelo referred Ms. D to the third functional assessment at DEAHY which took place on November 19, 1998. Dr. Mastrangelo did not know whether the assessments were different. He testified that he does not know what to make of lengthy documents such as the DAC assessment which measure such things as finger strength. I heard no evidence to explain the necessity of the third DEAHY functional capacity assessments within six months of the other two assessments. I do not find that the expense for the DEAHY functional assessment was reasonable.

Psychological evaluation:

On August 17, 1998, Ms. Joanna Mitsopulos, a psychologist and Kathleen Russell, a psychotherapist, assessed Ms. D at Dr. Mastrangelo's request. They found that she suffered from moderate depression and severe anxiety and recommended 12 to 15 psychotherapy sessions. They found no significant pre-existing psychopathology to account for her depression and anxiety and therefore concluded that it was caused by the accident. The OHIP record indicates that Ms. D underwent two therapeutic abortions 15 months and 13 months before the motor vehicle accident. Dr. Mastrangelo was unaware of the abortions and all of the assessors noted that Ms. D's pre-accident medical history was unremarkable.

Halifax denied the proposed treatment plan and submitted it to a DAC. On September 24, 1998, Dr. Sergio Bacal, a psychologist, performed the DAC assessment. He noted an entirely normal medical history and an array of depressive features, the most significant of which was a pervasive feeling of guilt. He recommended six to eight psychotherapy sessions and Halifax agreed to pay for eight sessions. Ms. D underwent the treatments with psychotherapist K. Russell.

Dr. Mastrangelo referred Ms. D to a third psychological assessment with DEAHY which was performed by Dr. Howard Waiser, a psychologist. He recommended 12 to 14 sessions.

In my view, where Ms. D had already undergone two psychological assessments and was in the process of undergoing treatment, a third assessment within a matter of months was not helpful. This is particularly so, when Ms. D did not inform the assessors about her medical history going back 15 months before the accident.

Physiotherapy assessment:

Halifax agreed to pay for the eight weeks of physiotherapy treatment at ACT Health Group as recommended by Dr. Mastrangelo. Although the treatment plan was for three to five times per week, Ms. D only attended twice a week. Dr. Mastrangelo said that she did not find it helpful. I heard no other evidence to explain why she did not attend physiotherapy three to five times a week as recommended by her doctor. Ms. D was still attending physiotherapy at ACT when she asked for the referral to DEAHY. The ACT discharge report noted that Ms. D was pain-focussed and limited herself. The physiotherapist recommended a home exercise programme. Other than Dr. Mastrangelo's testimony that Ms. D did not like ACT, I heard no evidence to explain why the home exercise programme failed and how another physiotherapy assessment would help her. I therefore find that the expenses for the DEAHY physiotherapy assessment was not reasonable.

Medical assessment:

The DEAHY medical assessment was performed by Dr. Brian Alpert, an orthopaedic surgeon. He mailed his report to Dr. Mastrangelo on January 29, 1999. In the meantime, Dr. Mastrangelo had arranged another orthopaedic assessment with Dr. Martin Roscoe, which took place one week later. I find that Dr. Mastrangelo would not have arranged an orthopaedic assessment with Dr. Roscoe if he intended to rely on the DEAHY assessment. Accordingly, I find that Dr. Alpert's assessment had no value to Dr. Mastrangelo and that the expense of the assessment was unreasonable.

EXPENSES:

If the parties cannot agree on the issue of entitlement to expenses of the arbitration proceeding, they may make written submissions within 60 days of the date of this decision.

July 27, 2000

William J. Renahan Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 139

FSCO A99-000690

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

M. D. Applicant

and

HALIFAX 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. The application for arbitration is dismissed.

2. If the parties cannot agree on the issue of entitlement to expenses of the arbitration proceeding, they may make written submissions to me within 60 days of the date of this decision.

July 27, 2000

William J. Renahan Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.
2. 2Macaulay and Sprague, vol. 2 (Scarborough: Thomson Canada Limited, 1997), at 29A.2