Jeffrey Blake v. Jevco Insurance Company, 2001 ONFSCDRS 81

Financial Services Commission of Ontario

Neutral Citation: 2001 ONFSCDRS 81 Appeal: P00-00026 Office of the Director of Arbitrations

Jeffrey Blake, Appellant and Jevco Insurance Company, Respondent

Before: Stewart M. McMahon, Director's Delegate

Counsel: Paul Heselden (for Mr. Blake) Edmund Kent (for Jevco)

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.

Date: May 31, 2001 Stewart M. McMahon, Director's Delegate

Reasons for Decision

I. Nature of the Appeal

This appeal is concerned with the arbitrator's determination that Mr. Blake's residual earning capacity should be calculated on the basis that he was capable of working full-time as an electronic assembler. Mr. Blake makes two principal arguments.

The first deals with the distance that Mr. Blake could be expected to travel to and from work. Section 30(2) 2 of the SABS-94¹ provides that the determination of residual earning capacity should be limited to a consideration of employment that "exists in the area in which the person lives." Mr. Blake argues that the arbitrator misconstrued this phrase, leading her to consider employment that was only available outside of the area in which he lived.

The second argument deals with the weight the arbitrator gave to the report of the residual earning capacity designated assessment centre (REC DAC). Mr. Blake argues that the arbitrator erred in preferring the REC DAC's conclusions, over the opinions of the experts he relied upon.

II. Background

Mr. Blake lives in the town of Barrie, north of Toronto. He injured his right ankle in a motorcycle accident on October 13, 1994. The injury exacerbated a pre-existing osteoarthritic condition, resulting in a permanent disability. Jevco Insurance Company (Jevco) paid Mr. Blake income replacement benefits (IRBs) on the basis that this disability prevented him from resuming his duties as a steel fitter. A two-week REC DAC assessment was conducted by WORK ABLE in the spring of 1997. The DAC issued a lengthy report of their findings that included the following statement: "the assessment findings do not represent a valid profile of Mr. Blake's ability to earn based on his poor effort secondary to a strong pain focus and the resultant poor work behaviours. No residual earning capacity can be determined."

Jevco interpreted this phrase to be an expression of the DAC's belief that Mr. Blake had failed to co-operate. Section 23(6) of the SABS-94 provides that the insurer may stop paying IRBs, and begin paying loss of earning capacity benefits (LECBs) based upon its last offer, if the REC DAC withholds its report, and in its place issues a statement that the insured person failed to co-operate. Jevco took the position that the aforementioned statement in the report was the equivalent of a section 23(6) statement, and indicated that it intended to begin paying LECBs in accordance with its previous offer. This issue proceeded to a preliminary hearing. The arbitrator rejected Jevco's contention. However, she also found that the REC DAC report was flawed because it failed to offer an opinion on Mr. Blake's residual earning capacity.

WORK ABLE had advised that it was prepared to conduct a further REC DAC assessment. The arbitrator adjourned the hearing to allow for this assessment, and ordered Jevco to pay IRBs in the interim. Mr. Blake attended for the second assessment at WORK ABLE over a two week period in mid-August 1999.

The 1999 REC DAC team determined that Mr. Blake was suited for a number of occupations, including working as an electronic assembler. As noted earlier, the insured person's residual earning capacity must be based upon employment that "exists in the area in which the person lives." The DAC conducted a labour market survey to fulfill this requirement. The report indicates that the Human Resources Development Canada (HRDC) job bank did not include any postings for an electronic assembler in Mr. Blake's "geographical area" but that there were postings in Markham, Concord and Thornhill. The report also listed companies in Keswick and Newmarket, but there was no indication that these companies were hiring new employees at the time.

Mr. Blake called Mr. Cameron Adams-Webber, who was qualified as an expert in vocational evaluation. Mr. Webber had also prepared a labour market survey. Like the REC DAC, his review of the HRDC job bank for Simcoe County (which contains the town of Barrie) did not reveal any references to industries employing electronic assemblers. However, he was able to locate openings in Richmond Hill and Vaughan. He testified that in conducting his search, he worked from the premise that a 30 to 35 minute, or 65 kilometre commute from Barrie was reasonable, and that the job postings he referred to fell within those boundaries. He also agreed that Concord and Newmarket fell within the boundaries.

III. The Arbitration Decision and the Arguments on Appeal

Did the arbitrator err in concluding that employment as an electronic assembler exists in the area in which Mr. Blake lives?

The arbitrator started by citing the statutory requirement that any occupation considered in determining the insured person's residual earning capacity, must exist in the area in which the person lives. She then considered what meaning ought to attach to the words, "exists in the area in which the persons lives." Finally she applied the evidence to the law.

In defining the term "exists in the area," the arbitrator cited with approval the following words taken from a 1996 REC DAC guideline:

The employment "exists" if there are people employed in that employment type in the claimant's area. The term "area" defines the labour market that the claimant could be reasonably expected to seek employment within.

Like the arbitrator, I adopt the definition of "area" as the "labour market that the claimant could be reasonably expected to seek employment within." The guideline is designed to assist REC DACs to carry out their mandate. It is not an interpretive guide for the public in the same way as a Superintendent's Guideline. Nevertheless, it may prove to be useful in analysing the provisions of the SABS-94. In this case, I find the words of the guideline sensible, pragmatic and flexible.

I agree with Mr. Blake's submission that the search area will vary depending upon a number of factors, including the location of the insured person's community. To cite another part of the REC DAC guideline, "this [defining the area] will...include an estimate of what would constitute a 'typical' commute for workers in this area. This will obviously vary across the province."

Mr. Blake argued at the arbitration hearing that the "area" ought to be limited to either the town of Barrie or Simcoe County. His principal argument on appeal was that the arbitrator erred in rejecting this submission, and concluding that employment in Newmarket, Vaughan and Richmond Hill existed within the area that he lived.

I am not persuaded by Mr. Blake's submissions. To the contrary, I can see no reason to apply a general rule that would limit the search area to the particular municipality where the person resides. While the municipal boundary may in some instances be the appropriate reference, universally limiting the search area in this fashion would belie the modern reality that many people live in one municipality and work in another. I can see even less reason to apply a general restriction that takes into consideration only work available within the county in which the person resides.

Beyond a theoretical discussion, the principal flaw in Mr. Blake's argument, at both the arbitration and appeal, is that there is no evidentiary basis for a finding that the area should be limited to Barrie or Simcoe County. The little evidence that was presented suggests otherwise.

The REC DAC's inclusion of job postings from towns outside of Barrie and Simcoe County implies that they were of the view that the appropriate search area extended beyond the municipal and county boundaries. Even more telling, Mr. Blake's own expert considered a search area that involved a commute of up to 30 or 35 minutes, or roughly 65 kilometres from Barrie, and included communities outside of Simcoe County. I can see no basis for criticizing the arbitrator's decision to accept the only evidence she was given.

On appeal, Mr. Blake also took issue with the arbitrator's decision to adopt the guideline's definition of "exists," as meaning that "there are people employed in that employment type in the claimant's area." He argued that employment should only be considered to "exist" if there are job openings at the time of the REC DAC assessment. Jevco argued for a more literal interpretation, suggesting that the criterion is satisfied if there are businesses located within the search area that employ the trade or occupation. Because the evidence reveals that there were job openings within the defined area, I need not decide this point.

Did the arbitrator err in preferring the evidence of the REC DAC over the evidence relied upon by Mr. Blake?

I now turn to Mr. Blake's submission that the arbitrator erred in preferring the evidence of the REC DAC over the evidence of other assessors who suggested that Mr. Blake's abilities were more limited. The starting point for this issue must be a statement that the weighing of evidence is primarily the duty of the arbitrator, not the duty of the Director or his delegates on appeal. Numerous appeal decisions have noted that it is not appropriate for the Director or his delegates to simply substitute their own view of the evidence for the arbitrator's. See for example Calogero and The Co-operators General Insurance Company (OIC P-000251, February 13, 1992). Given that appeals are now limited to questions of law, the deference to the arbitrator's findings of fact must be even more pronounced. Only a fundamental error in the way the arbitrator approached her consideration of the evidence will justify overturning her findings of fact.

The arbitrator noted at the outset, that the REC DAC report was written in a clear, straightforward and neutral manner by qualified assessors who followed the guidelines established by the Commission. As such, she concluded that the report should be given significant weight. Thereafter, she set out the competing opinions, and explained why she discounted the opinion, or preferred the DAC's opinion. Counsel for Mr. Blake was unable to point to any evidence that the arbitrator ignored in her reasons. I can see nothing wrong with her approach.

Mr. Blake argued on appeal that the WORK ABLE assessment centre was tainted and that its 1999 report should have been given very little weight.

As noted above, WORK ABLE initially did an assessment in 1997. After completing the two week assessment the DAC released a lengthy report of the testing done, but did not offer an opinion on Mr. Blake's residual earning capacity. Instead, the report contained the following statement "the assessment findings do not represent a valid profile of Mr. Blake's ability to earn based on his poor effort secondary to a strong pain focus and the resultant poor work behaviours. No residual earning capacity can be determined."

Shortly before the preliminary issue dealing with the implications of this statement, WORK ABLE delivered an addendum to their 1997 report. The addendum indicated the assessors interpreted the REC DAC guidelines to mean that if the claimant's performance was inconsistent, they should report that the findings were invalid, and that a residual earning capacity could not be determined. The addendum goes on to state that as a result of more recent directions from the Financial Services Commission of Ontario, the assessors now realize that even when the performance is inconsistent that they are still obliged to set out a determination of residual earning capacity.

At about the same time, Ms. Sandra Boddam, the occupational therapist member of the 1997 team, prepared a handwritten note which indicated she thought Mr. Blake had made an honest effort, that his limitations were due to genuine pain, and that in her estimation he was incapable of working full-time. Mr. Blake tendered this handwritten note into evidence at both the preliminary hearing, and the main hearing.

On appeal Mr. Blake argued that if Ms. Boddam believed that he had made an honest effort and was incapable of working, she should not have signed the 1997 report containing the statement that the results were invalid. He argued that it followed that if one member of the REC DAC team acted improperly, the entire team was tainted. He suggested this impropriety should have been obvious to the arbitrator and should have caused her to question the value of the 1999 report which was prepared by the same facility using a number of the same assessors.

The fundamental problem with Mr. Blake's proposition is that he never challenged Ms. Boddam's integrity (or by implication the entire REC DAC's integrity) until the appeal stage. There is nothing in the record to suggest that he held up Ms. Boddman's statement as evidence of some impropriety on her part, or argued that her evidence ought to be rejected. To the contrary, he tendered her statement as reliable evidence in support of his contention that he could not work. His present argument that her evidence is tainted by impropriety, and the evidence of the entire DAC team is tainted by association, is entirely inconsistent with the position he took at arbitration.

If Mr. Blake had made this argument at the arbitration hearing, Jevco could have attempted to rebut the inference by calling Ms. Boddam, or other members of the REC DAC team. By leaving the argument to this stage of the proceedings, Mr. Blake has prejudiced Jevco. In Sopinka and Gelowitz, The Conduct of an Appeal, Second Edition (Toronto: Butterworths, 2000), the authors note at page 63 that "an appellant may not raise a point that was not pleaded or was not argued in the trial court unless all relevant evidence is on the record." They note further, that the onus of establishing that all of the relevant evidence is before the appeal court, lies upon the party advancing the new argument. In this case, I am not satisfied that Mr. Blake has met that onus.

Even if the argument is appropriate for an appeal hearing, I find little merit in it. I am not satisfied that the statement by Ms. Boddam is proof that she acted improperly in signing the report. There could be many explanations for the apparent contradiction between her statement and the statement in the REC DAC report, that fall well short of any impropriety. The addendum report released by the REC DAC suggests one such explanation. The allegation of impropriety being made at this stage is mere speculation, that should have been explored at the hearing when the evidence necessary to establish or refute the allegation could have been presented.

More to the point, I was not presented with any evidence that could support a finding that when Mr. Blake obtained the statement it caused him to doubt WORK ABLEs integrity. He obtained Ms. Boddam's statement before the 1999 assessment was arranged, but I see no suggestion that he raised any objection to attending at WORK ABLE for the second assessment. Mr. Blake's present attack on the Centre's integrity smacks of a post facto attempt to impugn it because he is dissatisfied with the ultimate opinion.

IV. Appeal Expenses

There was very little merit to this appeal. The evidentiary basis did not exist for the first argument. The second argument was principally an attempt to create a basis for attacking the arbitrator's findings of fact, when no such basis existed. In the circumstances, Mr. Blake is not entitled to an award of expenses at the appeal stage.

Date: May 31, 2001 Stewart M. McMahon, Director's Delegate

Footnotes

1. 1Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996.