Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2002 ONFSCDRS 137

Appeal P01-00054

OFFICE OF THE DIRECTOR OF ARBITRATIONS

GUARANTEE COMPANY OF NORTH AMERICA

Appellant

and

DAVID PINHASOV

Respondent

Before:

Nancy Makepeace

Counsel:

Doug Wallace for Guarantee

Jadranka Cavrak for Mr. Pinhasov

Hearing Date:

June 5, 2002

APPEAL ORDER

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

1. The appeal is dismissed, and the arbitration order, dated October 25, 2001, is confirmed.

2. Guarantee Company of North America shall pay Mr. Pinhasov’s appeal expenses.

September 4, 2002

Nancy Makepeace

Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Pinhasov was injured in a motor vehicle accident on January 4, 1996. He received income replacement benefits, pursuant to s. 7 of the SABS-1994,¹ until December 17, 1997, when benefits were terminated. The Arbitrator found that Mr. Pinhasov remained disabled because of his accident-related injuries. He ordered Guarantee Company of North America (“Guarantee”) to reinstate income replacement benefits from December 17, 1997, and ongoing, until it complied with the provisions of Part VI of the SABS-1994 with respect to loss of earning capacity benefits. He also ordered that interest be paid on overdue benefits, in accordance with s. 68 of the SABS-1994. He dismissed Mr. Pinhasov’s claim for a special award under s. 282(10) of the Insurance Act, and deferred the issue of arbitration expenses.

On appeal, Guarantee submits that the Arbitrator erred in law by failing to apply the appropriate legal principles for assessing causation. Mr. Pinhasov submits that the Arbitrator applied the established causation principles, and that Guarantee’s real dispute is with the Arbitrator’s findings of fact, which are not reviewable because s. 283(1) of the Act permits an appeal only on “a question of law.”

I find no error in the Arbitrator’s decision. My reasons follow.

II. THE ARBITRATION DECISION

Mr. Pinhasov was a 39 year old travel agent at the time of the accident. The Arbitrator accepted that he was a successful agent who worked up to 60 hours a week (eight to twelve hours a day, five or six days a week) before the accident. There was no dispute about the essential tasks of his job.

After the accident, Mr. Pinhasov complained of disabling headaches, neck pain and back pain. Less serious problems included dizziness, nausea, and numbness in his legs. He was followed by his family doctor, Dr. S. Pliamm, and saw a number of specialists. Despite treatments including massage, physiotherapy, exercise, acupuncture, chiropractic, traction, trigger point injections and medication, Mr. Pinhasov did not return to full-time work. There was some evidence that he tried to return to work in April 1997, but the Arbitrator accepted that he was unable to do so until October of that year, when he returned to work on a part-time basis, working two or three hours a day, two or three days a week. By the time of the arbitration hearing in the summer of 2000, he had increased his hours to 25 hours a week - four or five hours a day, five days a week.

Aside from his accident-related injuries, Mr. Pinhasov suffered from atrial fibrillation. This condition, diagnosed in 1982, had forced him to give up his first career as a physical education teacher. He became a travel agent, a more sedentary job better suited to his health. The Arbitrator accepted Mr. Pinhasov’s evidence that his heart condition did not interfere with his work as a travel agent before the accident.

On September 25, 1996, about eight months after the accident, Mr. Pinhasov was taken to hospital with a complaint of sudden numbness to the left side of his face and tongue. Tests confirmed he had suffered a minor stroke as a result of his heart condition. His cardiologist, Dr. M. Strauss, prescribed Coumadin, a blood-thinner, which would be required on a life-long basis to prevent a recurrence. Although Dr. M. Levitan, a neurologist who treated Mr. Pinhasov for his accident-related injuries, suggested that the stroke might be related to the neck injury, Dr. Strauss dismissed the suggestion, as did the Arbitrator.

Guarantee argued that Mr. Pinhasov failed to return to full-time work because of his deteriorating heart condition, not his accident-related injuries.

The arbitration hearing lasted four days. The Arbitrator heard evidence from Mr. Pinhasov, his wife, his employer, Dr. Pliamm, and two specialists who conducted medical-legal assessments of Mr. Pinhasov: Dr. B. Alpert, an orthopaedic specialist, and Dr. M. Rathbone, a neurologist. Guarantee called only one witness: Dr. C.B. Paitich, an orthopaedic specialist.

The Arbitrator accepted that Mr. Pinhasov was disabled by accident-related soft tissue injuries of his neck and back, a mild head injury, and cervicogenic headaches. Although MRI scans revealed cervical and thoracic disc herniations, the Arbitrator accepted the prevailing medical opinion that they were not clinically significant.

The main issue was the role played by Mr. Pinhasov’s heart condition. The Arbitrator made three key findings:

• “before the accident Mr. Pinhasov was able to engage in the essential tasks of his employment as a travel agent, for 50 to 60 hours per week, despite his heart condition.”;²

• Mr. Pinhasov’s heart condition did not deteriorate significantly after the accident, “except for a brief period in September 1996 when he suffered a mild stroke,” from which he had fully recovered;³ and

• Guarantee “adduced no evidence about the impact of Mr. Pinhasov’s heart problem on his functional ability after the accident.”⁴

The Arbitrator concluded that the accident made a signficant contribution to Mr. Pinhasov’s inability to work more than 25 hours a week, which was less than half his pre-accident level, and that this amounted to a substantial inability to perform the essential tasks of his pre-accident employment, as required by s. 7 of the SABS-1994.

III. ANALYSIS AND CONCLUSIONS

Guarantee relies on the leading case, Athey v. Leonati (1996), 1996 CanLII 183 (SCC), 140 D.L.R. (4th) 235, in which the Supreme Court of Canada reviewed the well-established principles governing causation in tort law. Applying that decision in the accident benefit context, the basic principle is that the insured person must prove that the accident caused the disabling injuries. Where there are compensable and non-compensable causes, the test is whether the accident (the compensable cause) made a significant or material contribution to the insured person’s disability. This was the test expressly adopted by the Arbitrator:

Mr. Pinhasov does not have to prove that the accident is the sole cause of his disability. In order to establish a causal link between the accident and Mr. Pinhasov’s disabling impairments, it is sufficient to demonstrate, on a balance of probabilities, that the accident significantly or materially contributed to his disability. In this case, I am satisfied that the evidence supports the finding that the accident is a significant factor that contributed to his disability.⁵

Guarantee relies on Justice Major’s application of the basic causation principles to the “thin skull” and “crumbling skull” scenarios:

The essential purpose and most basic principle of tort law is that the plaintiff must be placed in the position he or she would have been in absent the defendant’s negligence (the “original position”). However, the plaintiff is not to be placed in a position better than his or her original one. [para. 32]

The so-called “crumbling skull” rule simply recognizes that the pre-existing condition was inherent in the plaintiff’s “original position”. The defendant need not put the plaintiff in a position better than his or her original position. The defendant is liable for the injuries caused, even if they are extreme, but need not compensate plaintiff for any debilitating effects of the pre-existing condition which the plaintiff would have experienced anyway. [para. 35]

Guarantee submits that the Arbitrator failed to consider and apply this rule. However, under the heading, “Entitlement to Weekly Income Replacement Benefits,” the Arbitrator said,

Guarantee took the position that any disability that Mr. Pinhasov may have since December 1997 is not attributable to the accident; rather, it is due to his deteriorating heart condition, which is unrelated to the accident.⁶

The Arbitrator discussed the evidence about Mr. Pinhasov’s atrial fibrillation at p. 2 (it necessitated a change in careers), p. 7 (it did not prevent him from working 50-60 hours a week as a travel agent before the accident ), p. 9 (Mr. Pinhasov testified that his heart condition is a serious problem, but the attacks have not become more frequent or caused him more stress since the accident), p. 12 (Mr. Pinhasov’s stroke resulted from his atrial fibrillation), and p. 16 (Dr. Mor’s evidence that Mr. Pinhasov suffered daily attacks which physically and psychologically exhausted him). The Arbitrator concluded that Mr. Pinhasov’s heart problems “did not deteriorate significantly after the accident,” except for the brief period following his stroke, and that “Guarantee has adduced no evidence about the impact of Mr. Pinhasov’s heart problem on his functional ability after the accident.” Although the Arbitrator did not use the phrase “crumbling skull,” there is no question he considered and rejected Guarantee’s position that Mr. Pinhasov’s difficulties resulted from deterioration in his heart condition, unrelated to the accident.

Guarantee submits that Mr. Pinhasov’s heart condition would have disabled him even if the car accident had never occurred, and therefore the “crumbling skull” rule relieves it of responsibility for his subsequent disability. I am satisfied the Arbitrator considered the evidence and applied the principles correctly.

Contemporaneous medical evidence about Mr. Pinhasov’s condition before the accident came from his cardiologists, Dr. M. Strauss and Dr. D.M. Newman. Guarantee relies on Dr. Newman’s report, dated February 25, 1994, stating that Mr. Pinhasov’s fibrillation attacks occurred once or twice a month and generally lasted a few hours. Dr. Newman described his symptoms as “benign but bothersome” and described his stroke risk as low.⁷

However, the pre-accident medical reports present a more complicated picture than the Insurer suggests. On November 23, 1993, Dr. Struass reported that despite medication, Mr. Pinhasov’s “twice or three time weekly episodes have now increased in the past six months to 10 hours per day.”⁸ In the February 1994 report that Guarantee relies on, Dr. Newman noted that Mr. Pinhasov’s longest episodes lasted up to two days. At that time, Mr. Pinhasov had been tried on a number of medications for some years, and Dr. Newman predicted he would likely need a pacemaker eventually.

Nevertheless, there is no question that the stroke worried Mr. Pinhasov and his doctors, and the addition of Coumadin to Mr. Pinhasov’s medications reflected his heightened risk. Guarantee relies on the August 13, 1998 report of Dr. S. Mor, a psychologist who saw Mr. Pinhasov a few times that summer. The Arbitrator accurately summarized the report:

Dr. Mor reported that Mr. Pinhasov was under a great deal of stress at the time — in addition to his accident-related problems of headaches, neck and back pain, he was suffering from daily fibrillation attacks which physically and psychologically exhausted him. He was taking Coumadin, a powerful blood thinner, which placed him at high risk of hemorrhaging. He had suffered a stroke and he was warned that, in his condition, a stroke could occur at any time. The thought of whether or not he should accept a proposed heart surgery to install a pacemaker was tormenting him; and he was worried about the family’s mounting financial problems.⁹

Guarantee also relied on Dr. Mor’s statement that AMr. Pinhasov was not consistent with his visits due to repeated fibrillation attacks and other physical ailments . . .” [my emphasis], implying that Mr. Pinhasov also could not work for these reasons. Although the Arbitrator did not address this comment directly, he accepted Dr. Mor’s report that Mr. Pinhasov was then “suffering from daily fibrillation attacks which physically and psychologically exhausted him,” and “had other stressors in his life, unrelated to the accident.”¹⁰ In my view, the Arbitrator’s statement that Mr. Pinhasov did not find the sessions helpful, and did not claim a psychological disability, indicate he was not persuaded the fibrillation attacks prevented Mr. Pinhasov from attending therapy sessions.

In a report dated February 11, 2000, Dr. Pliamm stated,

Since my last report to you [of April 14, 1997] regarding this gentleman’s condition, it would seem that his general health has deteriorated in that he has again started having problems with stomach pain (he has a history of a chronic duodenal ulcer) and he has experienced frequent cardiac palpitations. He continues to take Coumadin to prevent against suffering a stroke and he was prescribed Valium to take when required to help calm his nerves and help him sleep.

She also reported that Mr. Pinhasov “was experiencing more cardiac problems and in December [1999] was in the hospital due to prolonged palpitations.”¹¹ Guarantee relies on this comment, but does not refer to any other oral or documentary evidence about a December 1999 hospitalization.

In any event, these reports provided some support for Guarantee’s position that Mr. Pinhasov’s heart condition deteriorated after the accident. However, the Arbitrator appears to have recognized this in finding that Mr. Pinhasov’s condition did not “deteriorate significantly” after the accident [my emphasis]. The Arbitrator reached this conclusion after a detailed review of the evidence in a 25-page decision. Guarantee has not identified any particular error that warrants my intervention, much less an error of law. Guarantee’s real dispute is with the Arbitrator’s weighing of the evidence, but it is not my role to second-guess his assessment. In my view, the Arbitrator’s finding that Mr. Pinhasov’s heart condition did not deteriorate significantly was well supported by the evidence.

The key to the Arbitrator’s decision was his finding that “Guarantee has adduced no evidence about the impact of Mr. Pinhasov’s heart problem on his functional ability after the accident” [my emphasis]. That is the enquiry mandated by s. 7 of the SABS-1994, which focuses on disability, not impairment. The Arbitrator was not primarily concerned with Mr. Pinhasov’s medical condition after the accident, but rather with his ability to work, a different issue. Guarantee places particular weight on Dr. Mor’s report that Mr. Pinhasov’s daily fibrillation attacks were physically and psychologically exhausting. While this evidence tends to support Guarantee’s case, it does not directly speak to Mr. Pinhasov’s ability to work as a travel agent. Dr. Mor is a psychologist, not a cardiologist, and her comment was not endorsed by any of the other experts who saw Mr. Pinhasov. On my review of the arbitration decision and the expert reports, the only direct evidence on the point came from Dr. Strauss, Mr. Pinhasov’s cardiologist, who reported, in December 1996, two and a half months after the stroke, that Mr. Pinhasov could “return to his work as a travel agent from a cardiac point of view.” This corroborated Mr. Pinhasov’s evidence. The Arbitrator considered conflicting evidence about the severity of Mr. Pinhasov’s heart condition, and preferred the evidence presented by Mr. Pinhasov over Guarantee’s evidence. This conclusion was available to him, and I find no error of law.

Guarantee relies on Worku and Co-operators General Insurance Company for the proposition that where two or more causes significantly or materially contribute to the insured person’s impairment or disability, the motor vehicle accident must contribute at least an equal or greater amount than the other causal factors in order to establish the causal connection required by the SABS.¹² As I read the case, the arbitrator did not go that far. After expressly adopting the significant or material contribution test, she concluded that “both the accident and the assault made significant contributions to Ms. Worku’s condition,” and that the accident “contributed at least as much to Ms. Worku’s condition as the robbery and assault.” To the extent the decision stands for the proposition that the accident must be the more significant of two significant contributing factors, I do not accept it as a correct statement of the law.

However, as a practical matter, comparing the effects of a claimant’s compensable and non-compensable causes is helpful in deciding whether the compensable causes were significant. That is what the Arbitrator did. For the reasons given, he did not accept that Mr. Pinhasov’s heart condition deteriorated significantly, or that it became disabling after the accident. He also gave detailed consideration to the evidence about Mr. Pinhasov’s accident-related injuries. He accepted that they were disabling for a number of reasons. Mr. Pinhasov had a strong work history, verified by his employer. The notes of his family doctor, who had treated him for several years before the accident, revealed no pre-accident headaches or neck and back problems. Mr. Pinhasov made consistent complaints to all the experts who treated and assessed him after the accident. “With the possible exception of Dr. Paitich,” none of the experts who treated or assessed Mr. Pinhasov questioned his credibility.¹³ The Arbitrator found Mr. Pinhasov a credible witness and well-motivated to seeking treatment and return to work. In fact, he had returned to work on a part-time basis, and gave credible evidence, corroborated by his wife and his employer, about his inability to extend his hours because of his accident injuries. The Arbitrator found he had made a genuine effort to return to full-time work, but pain prevented him from doing so.

The appellate function is particularly unsuited for reviewing credibility findings, and the record in this case offers no reason for departing from this general rule. In my view, the evidence provided ample support for the Arbitrator’s conclusion that Mr. Pinhasov fits in the small percentage of people whose soft-tissue injuries do not resolve within a few months of the accident.

On December 10, 2001, Delegate McMahon ordered a partial stay of the Arbitrator’s order. He ordered Guarantee to pay ongoing income replacement benefits, plus $5,000 with respect to the benefits owing to date, but stayed the arbitration order with respect to loss of earning capacity benefits. As a result of my order, the stay is rescinded. Guarantee shall pay the remaining income replacement benefits owing, and shall comply with Part VI of the SABS-1994, with respect to loss of earning capacity benefits.

IV. APPEAL EXPENSES

Mr. Pinhasov successfully resisted the appeal, and I was offered no reason for denying him an expenses order. Guarantee shall pay Mr. Pinhasov’s appeal expenses.

September 4, 2002

Nancy Makepeace

Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended.
2. 2Arbitration decision, p. 7.
3. 3Arbitration decision, p. 21.
4. 4Arbitration decision, p. 23.
5. 5Arbitration decision, p. 23.
6. 6Arbitration decision, p. 5.
7. 7Insurer’s Medical Brief, Arbitration Exhibit 3, Tab 4.
8. 8Arbitration Exhibit 3, Tab 3. Dr. Strauss repeated this history in a later report, dated December 13, 1996, after the stroke.
9. 9Arbitration decision, p. 16. The report is found in Arbitration Exhibit 2, Tab 19.
10. 10Arbitration decisions, pp. 16 and 23.
11. 11Arbitration Exhibit 1, Tab 5.
12. 12(OIC A-002172, August 29, 1996).
13. 13Arbitration decision, p. 21.