Financial Services Commission
Commission des services financiers de l’Ontario
Neutral Citation: 2000 ONFSCDRS 222
Appeal P99-00059
OFFICE OF THE DIRECTOR OF ARBITRATIONS
PILOT INSURANCE COMPANY
Appellant
and
VESNA GULEVSKI
Respondent
Before:
David R. Draper, Director's Delegate
Counsel:
Grant E. Black (for Pilot Insurance Company)
Michael J. Henry (for Vesna Gulevski)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal is dismissed and the arbitration order dated October 29, 1999 is confirmed.
Pilot Insurance Company will pay Vesna Gulevski's reasonable appeal expenses.
December 12, 2000
David R. Draper
Director's Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Pilot Insurance Company ("Pilot") appeals from an arbitration order dated October 29, 1999. It contends that the arbitrator's factual findings do not support his conclusion that Vesna Gulevski continued to be substantially unable to perform the essential tasks of her pre-accident employment beyond June 29, 1996.
II. BACKGROUND
Before her accident, Ms. Gulevski was a full-time hairdresser. The arbitrator found that she worked approximately eight hours a day, five or six days a week. She took a half-hour lunch, but only infrequent breaks of two to five minutes. To do her job, Ms. Gulevski had to use a variety of hand-held instruments and keep her hands and arms elevated to just below shoulder height for 30 to 45 minutes at a time. She was on her feet virtually the whole day, frequently walking, bending, stooping and twisting. In 1993, Ms. Gulevski earned $20,965.80, plus tips of $2,000 to $2,500. In the six months before the accident, she earned $9,192.71, excluding tips.
The accident happened on June 30, 1994. The arbitrator found that Ms. Gulevski was seriously injured, suffering fractured ribs, fractured vertebrae, temporary partial paralysis of her legs and feet, a closed head injury and soft tissue injuries to her neck and back. Pilot accepted that her injuries prevented her from returning to work and, therefore, paid IRBs under s.7(1)1 of the SABS-1994.1
According to s.8(1) of the SABS-1994, IRBs are payable during the period that the insured person "suffers a substantial inability to perform the essential tasks" of his or her pre-accident employment. If he or she continues to qualify 104 weeks after the onset of the disability, loss of earning capacity benefits ("LECBs") become payable instead of IRBs. LECBs provide a lifetime benefit based on the difference between insured person's pre-accident earning capacity and his or her residual earning capacity. The transition from IRBs to LECBs is governed by Part VI of the SABS-1994.
By December 1995, roughly a year and a half after the accident, Ms. Gulevski had recovered to the point that she was able to participate in a return-to-work trial arranged by a case management company retained by Pilot. However, she continued to suffer from significant neck, shoulder and back pain that she claimed restricted her ability to work.
By the end of June 1996, Ms. Gulevski had increased her hours from one day a week for a couple of hours, to three hours a day for up to four days a week. At that point, Pilot terminated her IRBs, taking the position that she was no longer substantially unable to perform the essential tasks of her employment. Because the termination was one day before the 104-week mark, she did not receive an LECB offer.
After the termination of her IRBs, Ms. Gulevski applied for mediation, claiming she that she still met the test. When the dispute was not resolved, she applied for arbitration. The arbitration hearing did not take place until July 1999, three years after Pilot stopped paying IRBs. During the intervening period, Ms. Gulevski continued to increase her time at work. The arbitrator found that she worked a maximum of 25 hours per week — approximately two-thirds of her pre-accident hours. Despite her reduced hours, she was able to earn roughly 80 percent of her pre-accident income due to the fact that her employer started paying commissions instead of a straight salary.
One question at the arbitration was the precise issue in dispute. The arbitrator held, correctly in my view, that despite the passage of time, the issue was still Ms. Gulevski's entitlement to IRBs.2Because Pilot terminated her IRBs before the 104-week mark, its obligation to make an LECB offer under s.21 of the SABS-1994 was not triggered. However, as the arbitrator held, if he determined that Ms. Gulevski continued to qualify for IRBs, Pilot would have to make an LECB offer and pay IRBs to cover the interim period.
The arbitrator dealt first with Ms. Gulevski's condition up to the 104-week mark, concluding that she remained substantially unable to perform the essential tasks of her employment. He then considered her condition up to the time of the hearing, again concluding that she met the test. As a result, he ordered Pilot to pay IRBs from June 29, 1990 onward, pending the transition to LECBs.
III. THE APPEAL
Appeals are limited to questions of law. Pilot acknowledges this, but submits that the arbitrator's factual findings do not support his conclusion. It points to the following findings as establishing that Ms. Gulevski was substantially able to perform the essential tasks of her pre-accident employment:
She was able to work two-thirds of the hours she worked before the accident.
She was able to earn 80% of the income that she earned before the accident.
She admitted she could work full-time with the assistance of medication, although it would leave her with little energy for other activities.
Surveillance shows her doing physical activities, including lifting a wheelchair.
These arguments are aimed more at Ms. Gulevski's situation after the 104-week mark. As set out above, the arbitrator found that in June 1996, when Pilot stopped paying LECBs, she was only working three hours a day, four days a week. Given the arbitrator's finding that this represented a sincere effort to return to work, I find no reason to second-guess his conclusion that she remained substantially unable to perform the essential tasks of her pre-accident employment.
The more contentious issue is whether Ms. Gulevski continued to meet the test as her work hours increased.3 While this may have been a close call, I am not persuaded the arbitrator erred. The determination of "substantial inability" involves an individualized inquiry that should not be lightly disturbed on appeal. In this case, the arbitrator was clearly impressed with Ms. Gulevski's efforts. He found that she was doing the best she could with the help of an understanding employer. Although she was able to work two-thirds of her pre-accident hours, he concluded that this reflected a substantial diminution in her capacity. In my view, this was within his authority.
Pilot also submits that the arbitrator failed to deal with its argument that because Ms. Gulevski was now paid by commission, allowing her to earn more in less time, she was not motivated to work full-time. I do not accept this argument. As stated above, the arbitrator was impressed with Ms. Gulevski's efforts. He found that despite her positive attitude and persistent efforts, she had been unable to reach her pre-accident level of work.4
Finally, Pilot submits that the arbitrator failed to determine the cause of Ms. Gulevski's pain. I find no basis for this contention. While there was conflicting medical evidence about the precise nature and source of her pain, the arbitrator accepted the consistent views of Drs. Devlin, Sharma and Bharatwal that it originated from the injuries she suffered in the automobile accident.5
For these reasons, the appeal is dismissed.
IV. APPEAL EXPENSES
Considering the outcome, I have no hesitation in awarding Ms. Gulevski her reasonable appeal expenses. If the parties are unable to agree on the amount, they should follow the assessment process set out in the Dispute Resolution Practice Code.
December 12, 2000
David R. Draper
Director's Delegate
Date
Footnotes
- Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule—Accidents after December 31, 1993 and before November 1, 1996.
- This ruling is consistent with my decisions in Gray and Zurich Insurance Company, (FSCO P98-00047, June 11, 1999) and Zehr and Canadian General Insurance Group, (FSCO P99-00010, June 11, 1999).
- Arbitration decision, p.14.
- Once the arbitrator determined that Ms. Gulevski qualified for IRBs at the 104-week, the LECB provisions were triggered. Based on the arbitrator's finding that she was working to her capacity, it is not obvious there would have been a significant difference between the amount of IRBs (less post-accident income) and LECBs.
- Arbitration decision, p.9.