Sisay Baynesagne Kassa v. Economical Mutual Insurance Company, 2001 ONFSCDRS 113

Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 113

Appeal Order P00-00053

Appellant

and

Respondent

Before:

Stewart M. McMahon, Director's Delegate

Appearances:

Sisay Kassa (in person)

Andrew Evangelista (for Economical)

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is allowed in part. Paragraph 1 of the arbitration order dated September 11, 2000 is rescinded and replaced with the following:

Pursuant to section 33(2) of the Schedule, Economical is authorized to suspend any income replacement benefit that Mr. Kassa is entitled to beyond February 1, 2000, until such time as he complies with the Insurer's requests for medical records.

The balance of the appeal is dismissed.
Each party shall bear their own expenses of the appeal.

July 26, 2001

Stewart M. McMahon

Director's Delegate

Date

I. NATURE OF THE APPEAL

Mr. Kassa appeals from an arbitration order dated September 11, 2000, which dismissed his claim for income replacement benefits (IRBs). Mr. Kassa challenges the arbitrator's determination that Economical Mutual Insurance Company (Economical) was entitled to invoke section 33(2) of the SABS-96¹ to defeat his claim on the basis that he had failed to provide information that it reasonably required. Mr. Kassa also challenges the arbitrator's conclusion that he failed to prove he was disabled, and the amount of his income in the 52 weeks preceding the accident.

II. BACKGROUND AND THE DECISION AT ARBITRATION

Mr. Kassa was involved in a motor vehicle accident on May 8, 1999. Shortly afterwards, he submitted a claim for IRBs which indicated he was self employed as a taxi driver. Mr. Kassa claimed to have earned $700 per week over the course of the preceding year. He also submitted a "treatment plan" for the treatment of typical whiplash type injuries.

Economical approved the initial treatment plan, suggesting that it was satisfied that Mr. Kassa had been injured in the accident. However, it immediately retained accountants to review his financial circumstances.

When Mr. Kassa first met with the accountants he provided very little documentation concerning his business. He gave them a few (ten) daily trip sheets, a couple of bank-account passbooks, and 14 envelopes containing notes of his revenues over 15 weeks. None of the documentation referred to his expenses. The accountants reported to Economical that the documentation supplied by Mr. Kassa was "grossly deficient," and that they could not "make a calculation of Mr. Kassa's income from the records with any degree of certainty or confidence." They concluded that "the information Mr. Kassa has provided to us is inadequate for anyone to make a reasonable determination of his pre-accident income." Relying upon section 33 of the SABS-96, Economical put Mr. Kassa on notice that if he did not supply the necessary information it would not pay benefits.

Mr. Kassa responded to this demand by providing the accountants with some further documentation that included more trip sheets (however most of them did not relate to the relevant time period), a portion of a 1999 appointment calender with some notations concerning revenues and expenses, a few receipts for expenses, and letters from two cab companies regarding fees paid by Mr. Kassa. The accountants were not satisfied with this additional information and reported to Economical that they still could not determine the amount of Mr. Kassa's income. Economical in turn, advised Mr. Kassa that it would not pay IRBs.

A couple of months after the accident, Economical decided to investigate Mr. Kassa's claim that he was disabled. In mid-July, it arranged for medical assessments by a neurologist and an orthopaedic surgeon. The neurologist reported that Mr. Kassa was unfit to return to work, whereas the orthopaedic surgeon reported that he was fit to return to work. Economical sent copies of the reports to Mr. Kassa without any comment on its views of whether or not he was disabled.

At about the same time, Economical arranged for a review of Mr. Kassa's treatment by a designated assessment centre approved to assess medical and rehabilitation issues (MED REHAB DAC). The DAC reported that no additional formal treatment was necessary, but because of persistent abdominal and groin pain, the assessor suggested further diagnostic testing. The rehabilitation consultant retained by Economical met with Mr. Kassa's family physician in the fall of 1999 to arrange for this testing. When the consultant did not receive copies of the test results she wrote to the physician in late February 2000 asking for a copy of his entire file. The doctor did not respond to this request.

Mr. Kassa responded to the refusal to pay IRBs by filing for mediation. The report of the mediator notes that non-payment of benefits was due to the insufficiency of the financial records (the section 33 defence). In December 1999, Mr. Kassa filed an Application for Arbitration seeking payment of IRBs. Economical's Response relied upon the section 33 defence, and pleaded in the alternative that Mr. Kassa was not disabled.

The arbitration proceeded to a pre-hearing in April 2000, at which time Mr. Kassa's counsel gave an undertaking to produce the clinical notes and records of a number of medical practitioners. These undertakings remained largely unanswered to the time of the hearing. However, Mr. Kassa produced two medical reports supporting his claim that he remained disabled. In addition, Mr. Kassa produced a few additional financial documents.

The only witnesses at the hearing were Mr. Kassa, the accountant retained by Economical, and a claims representative.²

Mr. Kassa did not file the clinical notes of either of his treating physicians, or the rehabilitation centre. Nothing in the arbitration record suggests that any evidence was lead to indicate that Mr. Kassa had attempted to obtain his initial family doctor's file, or the treatment centre's records. To the contrary, the arbitrator's decision notes that Mr. Kassa admitted during the hearing that while he had signed an authorization to allow Economical to obtain medical records, he subsequently instructed his family doctor not to respond to Economical's requests. He also refused to authorize other doctors to release their files.

The arbitrator commenced her consideration of the section 33 issue by reviewing the production requests relating to the financial documentation, the accountant's viva voce evidence concerning the deficiencies in the documents, and Mr. Kassa's evidence suggesting that the documentation was sufficient. The arbitrator preferred the accountant's opinion that the documentation was insufficient to calculate an IRB. In addition, she reviewed the documents herself and concluded that they were inadequate. Based upon these findings she ruled as follows; "pursuant to section 33 of the Schedule, that the Applicant provided insufficient information for Economical to calculate the amount of his IRB and accordingly he is disentitled to a benefit for this reason."

The arbitrator also reviewed the production requests in relation to the medical records, and the limited number of documents provided by Mr. Kassa at the hearing. His admission that he revoked his earlier authorization concerning the records of his family doctor, and his refusal to release other medical records, figures prominently in the arbitrator's reasons. She concludes: "In the end, the Applicant furnished Economical scant medical information to substantiate his disability claim. Accordingly, I find he is also disentitled to an IRB for this reason."

After concluding that section 33 operated as a bar to Mr. Kassa's claims, the arbitrator went on to assess the additional evidence he presented at the hearing. She concluded that when this information was combined with the documents he had produced in advance of the hearing, it remained insufficient to establish either the requisite degree of disability, or his earnings in the 52 weeks preceding the accident.

Based upon these findings the arbitrator concluded that even if she had erred with respect to the section 33 issue, Mr. Kassa's application for IRB's should be dismissed on the basis that he had failed to prove his claim.

III. ARGUMENT AND ANALYSIS

A. The Section 33 Issue

(i) Did the arbitrator err in her application of section 33 to the production of financial documents?

Section 33 was part of a package of procedural reforms implemented by Bill 59, designed to make it easier for insurers to obtain the information they need to adjust legitimate claims, and to uncover fraudulent ones. It imposes a positive obligation on the insured to cooperate with investigations undertaken by the insurer. More specifically, it requires applicants to respond to four enumerated types of requests. In this case, we are concerned with the first of the listed requests, namely to provide:

33.(1)1 Any information reasonably required to assist the insurer in determining the person's entitlement to a benefit.

The penalty for failing to comply with such a request, is a suspension of benefits, set out in the following terms:

33.(2) The benefit is not payable for any period before the person complies with subsection (1).

The first step in considering an insurer's attempt to invoke s.33(2), is to ask if the information demanded was "reasonably required." This will necessarily involve some consideration of what evidence the applicant will ultimately need to proffer if they are going to prove their entitlement to a benefit. However, a distinction must be drawn between the insured person's obligation to cooperate with the insurer's investigation, and the insured person's ultimate obligation to establish their claim. The insured person might cooperate fully with the insurer's investigation by producing all the requested information, but still, in the final analysis, fall short of proving their entitlement to a benefit at a hearing. Conversely, and more to the point in this case, the mere fact that the information supplied by the insured person is insufficient to establish their entitlement, does not necessarily mean that they are subject to the penalty provisions of section 33. The penalty imposed by section 33 should be limited to instances of misconduct, in which the insurer is able to demonstrate that the insured person is intentionally withholding information in an attempt to interfere with a legitimate investigation.

Assuming, for the purposes of this appeal that section 33 applies to requests related strictly to the quantum of the insured's benefit, I am convinced that the arbitrator erred by applying 33(2) without adequately distinguishing Mr. Kassa's obligation to cooperate from his obligation to prove his pre-accident income.

The arbitrator focussed almost exclusively on the sufficiency of the information, and found it wanting. After making this finding she applied the penalty provided for in section 33(2), without asking if there was any reason to believe that Mr. Kassa was withholding documents in his possession or control. With some minor exceptions, the record does not suggest that Mr. Kassa was intentionally withholding financial documents. To the contrary, reviewing the reasons and the exhibits, I am left with the impression that Mr. Kassa produced as much as he was able to. The fact that this documentation, even when combined with his oral testimony, was insufficient to establish his pre-accident income, will ultimately mean that his claim fails, but it does not call for the punishment provided for by section 33.

(ii) Did the arbitrator err in her application of section 33 to the production of medical records?

I also have concerns about the arbitrator's application of section 33 in relation to the production of medical records.

Unlike the situation relating to the production of financial documents, the arbitrator found clear evidence of Mr. Kassa's failure to cooperate, and I have no hesitation in upholding her conclusion that it was appropriate to apply the penalty provided in section 33(2).

In support of her finding that Mr. Kassa failed to cooperate, the arbitrator listed the names of a number of medical practitioners whose records Mr. Kassa failed to provide. Mr. Kassa correctly points out that one of the doctors, cited by the arbitrator, was a part of a DAC team, another was a rehabilitation specialist retained by Economical, and a third does not appear to be a member of the College of Physicians and Surgeons. Mr. Kassa argues that these errors bring into doubt the correctness of the arbitrator's conclusion that he had failed to cooperate. What Mr. Kassa's submission fails to account for is his admission on cross-examination that he revoked the authorization permitting Economical to obtain information from his family doctor, and his admission that he refused to obtain treatment records from other personnel cited by the arbitrator. I have no basis to interfere with the arbitrator's findings on this issue which, on the record before me, are well founded.

My concern relates to the nature of the penalty applied by the arbitrator. She found that Mr. Kassa was "disentitled to an IRB." The actual wording of the penalty imposed by section 33(2) is as follows:

33.(2) The benefit is not payable for any period before the person complies with subsection (1).

To my mind, the penalty is more in the nature of a suspension of a benefit that is otherwise payable, rather than a disentitlement. Amongst other difficulties, referring to the penalty as a disentitlement has a connotation of permanency, whereas the section is clear that the penalty is lifted once the person supplies the requested information. If the penalty is seen as a suspension rather than a disentitlement, then the need to establish the period over which the penalty operates becomes more obvious. This necessarily involves a consideration of when the suspension starts.

In this case, the arbitrator did not turn her mind to the period of the suspension. Instead, having found that he failed to comply, she ruled that he was disentitled to benefits. It is implicit in the ruling that the penalty was a complete bar from the inception of the claim onwards.

The evidence suggests that Mr. Kassa initially cooperated with Economical's requests for information concerning his medical condition. He provided a medical certificate, and a treatment plan for his rehabilitation program. When Economical arranged IMEs a couple of months later, Mr. Kassa attended, and there is no suggestion that he withheld any information from the assessors. Initially, Economical's caseworker had permission to discuss Mr. Kassa's care with his family doctor, and in fact met with him at least once. The first indication that Mr. Kassa attempted to block access to his medical records is found in a letter from the rehabilitation consultant to Economical dated February 21, 2000, in which she reports difficulty obtaining test results from the family doctor. It is apparent from the letter that the consultant had been trying to obtain the test results for some time. In the absence of any clearer evidence, I would be prepared to fix the date as of February 1, 2000. Counsel for Economical conceded that it would be inappropriate to apply the suspension before this date.

The arbitrator's ruling is varied such that the suspension of benefits pursuant to section 33(2) is effective as of February 1, 2000.

B. The Entitlement Issue

(i) Did the arbitrator err in concluding that Mr. Kassa had failed to establish his entitlement to an IRB?

The starting point for any discussion of this issue must be a statement that the arbitrator's conclusions on this issue are almost exclusively drawn from her findings of fact, including her assessment of Mr. Kassa's testimony. The decisions of this appeals unit have consistently stated that it is not the role of the Director or his delegates to rehear the case, or to second guess the arbitrator's weighing of the evidence. The amendment to section 283 of the Insurance Act, R.S.O. 1990, c.I.8, that restricts appeals to questions of law, further limits the power of the Director and his delegates to interfere with the arbitrator's findings of fact. Only the most serious misapprehensions of the evidence, or the failure to consider key evidence will warrant intrusion into what is fundamentally the bailiwick of the trier of fact.

As a general comment, Mr. Kassa complained that the arbitrator failed to adequately consider the evidence. In that regard, he points to the briefness of the arbitrator's reasons on this issue. It is true that the reasons found under the heading "disability and quantum claims" is quite brief, but the decision must be read as a whole. The arbitrator discussed the entitlement issue after she had disposed of the section 33 issue. As discussed above, in dealing with the section 33 issue, the arbitrator was principally concerned with whether or not the information provided by Mr. Kassa was sufficient to establish his entitlement to an IRB. In light of this, many of the comments relating to the section 33 issue are equally applicable to a consideration of the entitlement issue. When the decision is read in this fashion, the arbitrator's consideration of the evidence is much fuller than is apparent at first blush.

Mr. Kassa's most significant point is the absence of any reference by the arbitrator to the two IME reports and the DAC assessment. The DAC assessment was concerned with treatment issues, and did not speak directly to the extent of his disability, but the two IME reports deal with this issue directly, and Mr. Kassa's submission deserves comment.

As noted earlier in these reasons, Mr. Kassa was examined at Economical's request by an assessment team comprised of a neurologist and an orthopaedic surgeon in August and September 1999. The orthopaedic surgeon opined that Mr. Kassa did "not suffer a substantial inability to do the essential tasks of his employment." However, the neurologist responded to questions concerning disability by recording that while there were no objective neurological deficits that would impair Mr. Kassa's ability to work, the patient reported that his headaches, back-pain and difficulties concentrating impaired his ability to work.

An arbitrator cannot be expected to refer in the decision to all of the evidence she considers in her deliberations. However, if an arbitrator is going to dismiss a claim, she should refer to the principle evidence in the applicant’s favour. In this case, it would have been helpful if the arbitrator had referred to the neurologist’s report.

In considering whether or not an explicit reference to this report would have changed the arbitrator's opinion, I note that the neurologist report is a rather soft endorsement of Mr. Kassa's claim. There are no hard neurological findings. Instead, it is principally a recitation of Mr. Kassa's own view that the level of his pain was disabling. The arbitrator rejected Mr. Kassa's evidence on this point, and, when considering another favourable medical report, dismissed the doctor's opinion in part on the grounds that it was based solely on Mr. Kassa's self report. In addition, any discussion of the IME report would also involve a reference to the orthopaedic surgeon's opinion that Mr. Kassa was not disabled. I am not convinced that the arbitrator's conclusion that Mr. Kassa had failed to prove that he was disabled, should be interfered with.

C. The Quantum Issue

Mr. Kassa submits that the arbitrator erred in failing to determine the amount of his IRB. The arbitration decision is confusing in this regard. The "results" portion of the decision and the order both contain a paragraph that reads "I am not required to determine the quantum of the IRB." But in the body of the decision, the arbitrator does deal with the issue and concludes that the documentation supplied by Mr. Kassa, even when combined with his viva voce evidence, is insufficient to allow her to determine the amount of income he earned in the preceding 52 weeks.

Every applicant must prove on a balance of probabilities the income upon which their IRB is based. If they cannot meet this obligation their claim will fail. In this case, the arbitrator found, as a matter of fact, that Mr. Kassa had not proven his income. I have reviewed the financial documents in detail, and find no error with the arbitrator's conclusion. The information provided does not cover the entire 52-week period, it is inconsistent in places, and there are numerous gaps in the information. Amongst other things, I tried to determine if there was a minimum amount that could be imputed to Mr. Kassa, even though there were periods where there was no evidence of income. However, because the information concerning the expenses was incomplete, inconsistent and contradictory, and it was not clear if Mr. Kassa continued to incur expenses over the portion of the preceding 52 weeks in which he did not work, such as when he went overseas, it was not possible to calculate any minimum amount.

D. The Allegation That The Arbitrator Was Biased

Mr. Kassa claims that the arbitrator was biased. This is a very serious allegation that is aimed at the arbitrator's integrity, rather than at the correctness of her decision. It is a charge that should only be levelled in the most grave circumstances. In this case, the only basis for the allegation was the arbitrator's rejection of Mr. Kassa's evidence. I find absolutely no merit in Mr. Kassa's submission.

E. Mr. Kassa's Request To Introduce New Evidence

Before concluding these reasons, I must comment on Mr. Kassa's attempts to introduce new evidence at the appeal stage.

Mr. Kassa's Notice of Appeal had a medical report from a psychiatrist appended to it. The report related to an examination that was conducted after the conclusion of the arbitration hearing. I ruled at the time that the report was to be excluded.

Mr. Kassa's subsequent written submissions and appeal book contained numerous additional references to materials that were not before the arbitrator. The most significant were letters from Mr. Kassa's counsel to his first family doctor requesting clinical notes and records, a copy of the doctor's file and a copy of the rehabilitation centre's file.

Mr. Kassa sought to file these materials to demonstrate that he had been attempting to answer his undertaking to deliver these records to Economical, and to respond to the arbitrator's inference that he had "attempted to conceal information that might be adverse to his claims." In my view, it would be manifestly unfair to allow Mr. Kassa to introduce these materials at this stage.

What efforts Mr. Kassa made or did not make to secure these medical records was at the heart of the hearing. Any evidence concerning his or his counsel's efforts could and should have been put forward at the arbitration hearing. In light of the fact that Mr. Kassa admitted that he would not authorize the disclosure of his doctors' clinical notes and records to the insurance company, Economical should at the very least have an opportunity to test what use Mr. Kassa intended to make of the records once he had received them, by way of a vigorous cross-examination. By waiting until the appeal stage to submit evidence of his efforts to obtain these records, Mr. Kassa has effectively barred such a cross-examination. Likewise, if the doctor's clinical files are admitted at this stage, Economical will have no opportunity to have them reviewed by its own experts, or to call the practitioners as witnesses, or even to cross-examine Mr. Kassa in relation to the contents of the files. If these files were crucial to Mr. Kassa's claim, he could have presented evidence of his efforts to obtain the files, and asked for an adjournment of the hearing. It would be inappropriate to allow Mr. Kassa to introduce this evidence at this stage.

IV. EXPENSES

Although Mr. Kassa did not succeed in having the arbitration decision overturned, he was successful in having the rulings on the section 33 issue reversed in part. In the circumstances, each party shall bear their own expenses of the appeal

July 26, 2001

Stewart M. McMahon

Director's Delegate

Date

Footnotes

The 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.
The proceedings were recorded but Mr. Kassa chose not to order a transcript of the proceedings notwithstanding advice by myself in a pre-hearing letter about the potential problems in proceeding without one.