Neutral Citation: 2002 ONFSCDRS 161

FSCO A01-000333

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LORNA HOWDEN

Applicant

and

PEMBRIDGE INSURANCE COMPANY (PAFCO INS. CO.)

Insurer

REASONS FOR DECISION

Before:

John Wilson

Heard:

November 2001 to April 2002, at the offices of the Financial Services Commission of Ontario in Toronto.¹

Appearances:

David Wilson for Ms. Howden

Grant Dow for Pembridge Insurance Company (Pafco Ins. Co.)

Issues:

The Applicant, Lorna Howden, was injured in a motor vehicle accident on October 5, 1998. She applied for and received statutory accident benefits from Pembridge Insurance Company (Pafco Ins. Co.) ("Pembridge"), payable under the Schedule.² Pembridge did not continue weekly income replacement benefits past the 104 week mark. The parties were unable to resolve their disputes through mediation, and Ms. Howden applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Ms. Howden entitled to income replacement benefits beyond the 104 week mark on the basis that she suffers a complete inability to engage in any employment for which she is reasonably suited by education, training or experience?

2. Is Ms. Howden entitled to a special award?

Result:

1. Ms. Howden is entitled to income replacement benefits beyond the 104 week mark.

2. Pembridge shall pay to Ms. Howden a special award of 50 per cent of the outstanding benefits, including accrued interest.

EVIDENCE AND ANALYSIS:

Ms. Howden was born in a rural area of Jamaica, and first arrived in Ontario as a teenager. She had completed some schooling in Jamaica, before leaving for Canada. Once in Canada she took some further courses, before beginning work in the health care field, marrying and raising a family.

Ms. Howden remains a health aide, last employed in a nursing home, where she worked, assisting in caring for and cleaning up after patients. Her job requirements entailed significant lifting and physical work, as well as other, lighter, tasks.

Following her motor vehicle accident on October 5, 1998, Ms. Howden reported injuries to her right upper arm, forearm, and elbow, as well as the right shin. She complained of pain immediately, and was unable to resume her work at the nursing home.

In the months following the accident, the pain and discomfort continued and it soon became apparent that Ms. Howden would have difficulty returning to any heavy work, such as her own nurse's aide position. Ms. Howden still had not returned to her work some two years after the accident.

Subsection 5(2)(b) sets the criteria for payment of an income replacement benefit after two years of disability:

The insurer is not required to pay an income replacement benefit...for any period longer than 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training or experience.

The Insurer claims that Ms. Howden is no longer entitled to any income replacement benefits, since there are other jobs in her community that she could fill, if so inclined. The primary issues, then, in this hearing, revolve around whether Ms. Howden may now return to other available work that may be suitable for her by reason of her education, training or experience.

Secondarily, the dispute centres around Ms. Howden's actual level of training and ability, with the Insurer alleging that she has attained a much higher skill level and functional level than that acknowledged by the Applicant.

Disability

There is no real issue concerning Ms. Howden's basic disability. From the start, she demonstrated symptoms related to soft tissue injuries to the right arm, as a result of the accident.

The initial Disability Certificate stated:

Works in a nursing home handling patient. Unable to use R(ight) arm/forearm... restricted in use of R(ight) upper extremity due to hematoma and flexion contraction of the elbow.

These symptoms did not disappear with time, and Ms. Howden was left with impaired use of her right arm, and ongoing pain and myofascial tension.

Dr. Peter Parker, a physiatrist, examined Ms. Howden several times over a period between January and July 2000, at the request of the Insurer. He reported on July 8, 2000, that:

In summary, Ms. Howden continues to exhibit features consistent with soft tissue injury to the right upper extremity. The primary problem remains myofascial tightness with the secondary problem being swelling resulting in irritation to nerve structures.

Dr. Parker concluded:

It is my opinion that Ms. Howden will not be able to return to her pre-accident work activities. Given her young age and the unlikelihood of finding modified duties at her previous place of employment, consideration should be given to job retraining.

Ms. Howden's evidence, both in chief and in cross-examination, confirmed these same physical symptoms, the pain and her inability to do work that involved lifting or straining, such as her work as a health care aide. She further stated that exercise, including lengthy walking, causes her arm to swell, and the pain to increase.

I accept that Ms. Howden continued to suffer from a disability, arising from the accident, that limited her ability to do work involving lifting, physical exertion, or the use of her right arm or hand for extended periods of time. I accept, as well, that this disability has continued past the 104 week mark.

Ms. Howden testified that she enjoyed her work at the nursing home and had expected to return there. Having worked some 19 years for Central Park Lodge, she enjoyed some considerable seniority, and an income of about $28,000 per annum.

Alternative Employment Requirement

As noted earlier, if there is alternative employment available to Ms. Howden for which she is suited by reason of education, training or experience, she is not entitled to claim an ongoing income replacement benefit past the 104 week mark.

This test is not unique to the Schedule. The same, or similar, wording appears in the context of disability insurance and other insurance products. As a result, a significant jurisprudence has developed, both at the Commission and in the Courts, interpreting the meaning of this provision.

The Bill 68 Schedule contained a provision that is reminiscent of the Bill 59 test. Subsection 12(5)(b) states:

The insurer is not required to pay a weekly benefit under subsection (1), ...(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.

Various arbitration decisions considered the meaning of subsection 12(5)(b). Arbitrator Manji, in Pedden and Dominion of Canada General Insurance Co. (OIC A-008977, December 29, 1995), stated:

In my view, an occupation or employment for which an applicant is "reasonably suited", under section 12(5)(b), is not any occupation or employment within the applicant’s physical and/or mental capabilities. The word "suited" is qualified by the word "reasonably". "Reasonable" is defined in the Black's Law Dictionary as "(f)air, proper, just, moderate, suitable under the circumstances". The words "reasonably suited" and "by education, training or experience" suggest an interpretation of section 12(5)(b) of the Schedule similar to that adopted by the courts in predecessor automobile legislation and under accident and sickness policies with wording very similar to that found in section 12(5)(b) of the Schedule

Although the phrase "continuously prevents" is absent from the wording of subsection 5(2)(b) of the current Schedule, otherwise, the two tests are quite similar, if not congruent.

Words common to both provisions, such as "reasonably" and "suited," are clearly expressions that incorporate values and standards. As Ruth Sullivan noted in Driedger on the Construction of Statutes, at p. 30:

Although it would be possible to look up words like these in a dictionary, the result would not be helpful because what is called for is a judgement based on principle or policy rather than an interpretation based on the shared conventions of language.

As noted, there is a relative continuity of phrase and wording, from the earlier Schedule "C" cases to Bill 68 and cases involving disability insurance. Consequently, I accept Arbitrator Manji's suggestion that guidance be sought in the decisions of courts and tribunals in defining the impact of the current enactment, and find her comments applicable to the Bill 59 Schedule as well.

Without dealing with the jurisprudence in detail, it is clear that an inability to perform alternative work has implications beyond the literal meaning. As Reid J. stated in Foden v. Co-operators Insurance Association, (1978) 1978 CanLII 1622 (ON HCJ), 20 O.R. (2d) 728:

These decisions provide an impressive underpinning for the proposition that if a person is unable to perform a substantial portion of his work, or an essential or material aspect of it, or, in general, be able to perform his task to the standard of a reasonable employer, that person is totally disabled.

While the present wording refers to "complete inability" rather than just "substantial disability," the change in wording does not significantly affect the test. At best it provides a nuance to the meaning of the phrase.

Even beginning an analysis with ordinary meanings, it is not clear that such words can be easily pinned down. The Canadian Oxford Dictionary defines "substantial" as:

1. of real importance or value (made a substantial contribution). 2 a of ample or considerable size or amount (a substantial price increase). b (of a meal or portion of food) ample and filling, nourishing 3. of solid structure or build; stout (a substantial house; a man of substantial stature).

It does not mean "partial" or "incomplete."

The same volume defines "complete" as:

1. having all its parts; entire (the set is complete). 2. finished (my task is complete). 3. of the maximum extent or degree (a complete surprise; a complete stranger).

The earlier definition foresees a disability that is ample, solid, of considerable size or amount, while the latter could mean entire, finished, or of the maximum degree. Black's Law Dictionary in turn, defines "complete" as:

Full; entire; including every item or element of the thing spoken of, without omissions or deficiencies; as a "complete" copy, record, schedule, or transcript.

It would stretch credulity if compensation for a disability would be restricted to someone with the maximum degree of disability only.

What, if anything, did the legislature mean by the change from "substantial" to "complete"? Although British legal tradition includes a presumption that change is purposeful, the legislature, in Ontario, has seen fit to alter this rule. Section 18 of the Interpretation Act, R.S.O. 1990, c. I-11, states as follows:

The amendment of an Act shall be deemed not to be or to involve a declaration that the law under the Act was or was considered by the Legislature to have been different from the law as it has become under the Act as so amended.

Even if this provision is not specifically applicable to delegated legislation such as the Schedule, it is important to note the comments contained in the third edition of Driedger on the Construction of Statutes (Ruth Sullivan, Butterworth's Toronto 1994) at p. 451:

In Canada, where making formal improvements to the statute book is a minor industry, the presumption of substantive change is weak and easy to rebut.

Even if, as some suggest, the threshold, post 104 weeks, should be found to be much enhanced from the Bill 68 level (see Lombardi and State Farm Mutual Insurance Company, FSCO A99-000957 April 11, 2001), I am prepared to find, for the reasons that follow, that Ms. Howden would still have a complete inability to engage in any employment for which she is reasonably suited by education, training or experience.

Education and Training level

As noted, there was a fundamental disagreement in the perception of Ms. Howden's skill level between the parties.

The Insurer, for the most part, relied on tests and interviews performed by Dr. Jonathan Siegel, a psychologist, for the foundation of its assessment of Ms. Howden's skill, training and capabilities.

Dr. Siegel's observations were recorded in notes, test results, and a written report, as well as his actual testimony at the hearing.

The Insurer adopted Dr. Jonathan Siegel's impression that: "she (Ms. Howden) completed high school in Jamaica."

There is little disagreement that Ms. Howden took some night school courses in grade 10 mathematics and grade 11 English after her arrival in Canada.

There is also a general agreement that she took some vocational training as a health care aide at Seneca College. The Insurer’s view of this was that "a community college certificate can be properly construed as post-secondary level education." Consequently, it viewed Ms. Howden as having sufficient educational achievement to perform jobs requiring post-secondary education as a prerequisite.

Ms. Howden’s evidence and that of Mr. Katz, the vocational rehabilitation expert who testified on her behalf, was that Ms. Howden may have completed the equivalent of a primary school education at a small rural school before her departure from Jamaica.

This would be consistent with taking upgrading courses in Canada, at a relatively low grade level.

Dr. Katz’s evidence with regard to the course taken under the auspices of Seneca College was that it was a skills upgrading course, that had no academic prerequisites, and which did not result in a conventional community college certificate. As Mr. Wilson submitted:

This course can in no way be considered as a post secondary school education. Mr. Katz testified and his evidence was undisputed, that this course was consistent with the type of courses that the government was promoting in the 1970s to provide unskilled people with some type of specific training.

Clearly, there is a significant difference in the way the two sides have characterized Ms. Howden’s educational skill set.

Ms. Howden’s formal educational qualifications, however, were not presented in a vacuum. Rather, corroboratory evidence was provided in the context of tests administered by Dr. Siegel as part of his Insurer’s examination.

Dr. Siegel and his staff administered a battery of tests which were designed to evaluate functional skills levels for Ms. Howden. These tests included the North American Reading Test (NART), the Wide Range Achievement Test (WRAT III), and the General Aptitude Test Battery (GATB).

Dr. Siegel's report found that the NART demonstrated "average intellectual potential." The WRAT III showed that "she is reading at a post-high school level. Spelling ability was measured at the Grade 8 level. Arithmetic was measured at the Grade 5 level." The GATB scores showed for verbal aptitude "significantly below average range." Likewise, the GATB tests for numerical aptitude, spatial aptitude, form perception, clerical perception, motor co-ordination, finger dexterity, and manual dexterity all showed the same results.

Although the administration of the tests and the correlation of the test result data are, in themselves, significant issues in this hearing, the relatively poor results appear to be consistent with Ms. Howden's evidence that she had limited education in Jamaica, and very little formal education after her arrival in Canada. Both Ms. Howden's and Mr. Katz's evidence is that her formal education in Jamaica ended by age sixteen.

The evidence is that Ms. Howden took courses in grade 10 mathematics, and grade 11 English after her arrival in Canada, and had previously completed the Jamaican equivalent of primary school. There is no other evidence that suggests otherwise, with the possible exception of Dr. Siegel's bald assertion that she had completed high school.

The attempt to characterize the training as a health care aide, as completion of post-secondary education is also somewhat misleading. The Canadian Oxford Dictionary defines "post-secondary" as: "of or relating to education occurring after the completion of high school."

While it might be acceptable to state that Ms. Howden received vocational training from an institution that also offered post-secondary education, it is incorrect and misleading to state that it constituted post-secondary education. Having only started two credits at a high school level, she certainly has not completed high school. Moreover, the evidence is clear that her skills upgrading course did not require high school as a prerequisite.

I find that, in all probability, Ms. Howden’s education, prior to her arrival in Canada, reached at the most, the equivalent of the completion of a Canadian primary school. Her subsequent formal education in Canada consisted of a few high school courses, and a vocational skills upgrading course. Therefore, she had neither a high school, nor a post-secondary education.

Basic Skills

As noted, Dr. Siegel administered a series of tests, designed to provide some indication of Ms. Howden’s abilities. Even accepting the test results at face value, Dr. Siegel found:

An estimate of intellectual ability places Ms. Howden in the average range. By contrast, scores on timed tests measuring various aptitudes, including verbal, numeral aptitude and spatial aptitude, as well as clerical perception and finger dexterity, placed her significantly below average.

Ms. Howden was also assessed by her own vocational counsellor, Mr. Katz. As mentioned, I found Mr. Katz to be a credible and balanced expert witness.

Mr. Katz interviewed Ms. Howden, reviewed the various assessment reports and observed:

This woman is very capable of attending to the physical and emotional needs of sick people, but she is not nearly as good at administration. On interview, we asked her to obtain several documents for us, and although we are sure she meant well, her follow-through was poor. She is simply not adept at writing letters, making (business or research) phone calls or taking control of an unfamiliar situation. Even with further training, she would never do well in a clerical or administrative position.

Ms. Howden also testified that she had no computer skills, and had only just been introduced to the operation of a computer, by her daughter, just prior to the hearing. She had done no other work, other than assisting in a retirement home for some two decades.

Although the Insurer pointed to her ability to run a household and raise children as evidence of some very basic transferrable skills, Ms. Howden's evidence was that her husband handled the finances and much of the responsibility for household management. Indeed, this is consistent with her quite low level of numeracy, as shown on Dr. Siegel's testing, and with her testimony at the hearing.

It should be remembered that, although Ms. Howden had, at one time, studied grade 10 mathematics, Dr. Siegel's testing showed her actual skill level as that of a grade 5 level for arithmetic. In any event, there was no evidence as to Ms. Howden's performance in the grade 10 mathematics programme, and whether or not she successfully completed the course at all. The balance of the probative evidence presented at the hearing strongly suggests that, whatever level of mathematics she may have once attained, her current skill level is that of a primary level student.

Ms. Howden's job descriptions show that she had evidently learned to physically handle patients, to feed and clean them, to change beds, and to perform the myriad support tasks required in a health care facility. The nature of her injuries, however, prevented her from doing the work she had learned, and liked. Even the Insurer's own examiners speak of her unsuitability for her pre-accident work.

Although her experience as a long-term employee in a nursing home setting may have provided her with a range of skill sets, her physical limitations made those occupation-specific skills of limited use in alternative employment.

As a result, in the context of searching for alternative employment, Ms. Howden's usable skills are limited. She has no computer or typing skills, and has limited use of her right arm, so even her writing skills may be impaired. She has limited arithmetic skills, and her writing and verbal expression leave something to be desired. Although friendly and well-disposed, as Mr. Katz noted:

She is friendly but not a "talker" - her statements are short and to the point. Her speech and grammar are appropriate for working with the elderly residents at the senior’s home, but it is too informal for dealing with customers in an office.

Even accepting Dr. Siegel’s testing at face value, Ms. Howden, in terms of usable and portable skills to take to another job, has little except very basic literacy and numeracy, and her expressed preference to work rather than remain at home. I accept that characterization of Ms. Howden’s marketable skills.

Proposed Alternative Positions

The Insurer has stated that there are a multitude of positions that Ms. Howden could fulfill and which would be appropriate to her current state of health and training. Dr. Siegel’s report contains several suggested occupations. These include an admitting clerk, a bookstore clerk, a dispensary assistant, a post officer clerk, a retail sales clerk, a tele-marketer, and a video store clerk.

Mr. Adams-Webber, a vocational consultant retained by the Insurer, in his report and testimony went beyond Dr. Siegel’s initial recommendations and put forward a further occupational list that he believed to be suitable for Ms. Howden. Mr. Adams-Webber further suggested the occupations of metre reader, film mounter, clinic assistant, collection clerk, and teller, as alternative occupations for Ms. Howden

It should be remembered that jurisprudence at the Commission and in disability matters has long established that occupations, for which Ms. Howden is said to be reasonably suited by education, training or experience, must also meet the secondary criterion that the work in question relates somewhat to previous job experience in terms of status and reward. Positions and work that, in light of experience and/or education are trivial or inconsequential, should not be included.

Both Dr. Siegel's and Mr. Adams-Webber's recommendations were based on the observations and test-data recorded by Dr. Siegel.

Dr. Siegel's Evidence

As noted earlier, there are some serious shortcomings to Dr. Siegel's appreciation of Ms. Howden's skills and abilities. The misunderstanding or exaggeration of the level of formal education received by Ms. Howden is, perhaps, the most obvious problem with Dr. Siegel's assessment. The discrepancies noted at the hearing between the raw test scores, and the reported results of the aptitude and skill testing performed by Dr. Siegel, also strongly suggest an exaggeration or overstatement of Ms. Howden's abilities. Whether intentional or not, this further weakens the value of Dr. Siegel's opinion, and I give it little weight.

For example, although Dr. Siegel lists ten out of eleven tests as showing that Ms. Howden's current skill set is "significantly below average," his summary concludes that "an estimate of intellectual ability places Ms. Howden in the average range," and that "she has the ability to take courses at the college level."

In cross-examination, some of the shortcomings of Dr. Siegel's report were drawn out. As the Insurer specifically noted in its submissions, "the Insurer accepts that upon cross-examination Dr. Siegel acknowledged that his report was inadequate and could have been improved." Beyond that, the cross-examination drew out peer concerns about objectivity in Dr. Siegel's work, and a disconcerting unfamiliarity with the evolution of the test formats that he administered. When challenged specifically about the testing that formed the backbone of his report and its assumptions, Dr. Siegel repeatedly backtracked on his previous opinions. When walked through the occupational qualifications listed under the proposed occupations, he admitted to incorrect or unsubstantiated assumptions underlying many of the recommendations.

He also specifically stated that many of the recommendations were made because of his erroneous impression that Ms. Howden had completed high school and his opinion that a successful completion of high school, in effect, overruled the extremely low GATB scores.

Expert witnesses enjoy both more latitude in giving their testimony than ordinary witnesses and a commensurate obligation to fairly provide considered, independent and non-partisan advice to the tribunal. In cross-examination, Dr. Siegel admitted to errors in the recording of test results, questionable assumptions concerning abilities, and what amounts to a sort of tunnel vision in reviewing the employability of Ms. Howden. Taken together, these individual problems compromise his evidence. Dr. Siegel, either through inadvertence or otherwise, failed in his duty to present an even-handed assessment of Ms. Howden.

While Dr. Siegel, with a doctorate in education and an expertise in psychology, was admitted as an expert witness, his opinion evidence cannot be accorded any significant, overall credibility. Consequently, the Insurer’s assertions of available employment, based on Dr. Siegel’s recommendations, cannot be given any weight.

The Adams-Webber Report

The Insurer commissioned Cameron Adams-Webber to report on the employment options available to Ms. Howden. Mr. Adams-Webber did not meet with Ms. Howden, but instead restricted himself to a review of documentation provided by the Insurer.

Mr. Adams-Webber received the report of Dr. Siegel, a report from Mr. Katz, and the Merit Assessment report (FAE) and used these to develop a picture of Ms. Howden’s personal vocational characteristics.

From the jobs selected in the first report and a subsequent report dated August 20, 2001, it is clear that Mr. Adams-Webber principally relied on Dr. Siegel’s summary report for his opinion of Ms. Howden’s capacities. Specifically, he accepts, without questioning, Dr. Siegel’s report that Ms. Howden had completed high school and possessed "post-secondary education," notwithstanding information to the contrary supplied by Mr. Katz. Needless to say, these misstatements significantly skew the reported outcomes. As an example, several of the jobs require a high school education as a prerequisite, while others require arithmetical ability beyond the grade 5 level demonstrated by Ms. Howden.

Mr. Adams-Webber also relied on the Merit Assessment FAE examination, conducted by Kendra Robinson, to support his assertion that Ms. Howden could have performed the tasks of metre reader, a job that required substantial walking. He interpreted the reported walking tolerance of occasional to frequent as an approval of significant walking-oriented occupations, up to 66% of the day, notwithstanding comments in the FAE that right-arm numbness developed with walking.

During Ms. Robinson’s testimony at the hearing, she revealed that she had previously undisclosed notes of the FAE that indicated Ms. Howden developed a significant physical reaction to the ten-minute walking portion of the FAE. Even if Mr. Adams-Webber did not knowingly misrepresent Ms. Howden’s walking abilities, the portion of the FAE that he relied upon in his report was, in turn, flawed, given its failure to reproduce clearly the complete observations of the walking trial.

Mr. Adams-Weber made significant assumptions when reporting Ms. Howden to be suitable for various employment. Under "collection clerk," he assumes an ability to "manage one’s own personal finances," something that Ms. Howden testified that she did not do.

He also assumed an ability to receive training and upgrading on the job, an assumption that runs counter to the low test scores, and indeed the Insurer’s characterization of her pre-accident work history in which counsel stated that "Ms. Howden's pre-accident job of more than 20 years appears to have been without any career progression."

The Adams-Webber report is also troubling in the way its author responded to challenges to its underlying assumptions. Mr. Katz wrote to Mr. Adams-Webber, pointing out the discrepancies in reported educational qualifications. By way of response, Mr. Adams-Webber merely reiterated Dr. Siegel's statement that Ms. Howden had completed high school in Jamaica.

Mr. Adams-Webber, in his report and in his testimony, minimized the incidence of piece-work and commission income in some of his suggested occupations, and was unwilling to concede that a disability such as Ms. Howden's could have an impact on remuneration in such situations.

To other challenges he merely reiterated selected statements drawn from the written materials supplied. He made no effort to verify the information, nor did he repeat his analysis of the data taking into account potentially adverse information.

Although it is important that an expert be prepared to support his considered opinion in cross-examination, excessive rigidity does little to enhance credibility.

As The Hon. Mr. Kaufman observed in the Ontario Commission on Proceedings Involving Guy Paul Morin:

An investigation can be perfectly structured but flounder due to "tunnel vision" or "noble cause corruption" or loss of objectivity or bad judgement.

Such is the appearance created both by Mr. Adams-Webber's report and his combative stance when upon the stand.

Although Mr. Adams-Webber has significant experience as an employment or vocational consultant, it is clear that he was operating on erroneous assumptions and significant misinformation in Ms. Howden's case. With computers, unreliable inputs create what has been called "garbage in - garbage out." Expert reports based on unreliable foundations also can suffer from the same syndrome.

Conclusions

As noted, Ms. Howden remains disabled from the motor vehicle accident. Her ongoing inability to use her dominant right hand, together with her inability to lift, restricts not only her pre-accident employment, but also most employment that she is qualified or likely to do.

Accepting that Ms. Howden had limited primary education in Jamaica, supplemented by a couple of night school courses, and that she currently exhibits great difficulty in doing arithmetic beyond the grade 5 level, it is hard to believe that Ms. Howden could successfully hold down any position requiring either numeracy or literacy.

Even many basic level jobs require an ability to enter data by keyboard or to operate the ubiquitous computers that proliferate in the workplace. The uncontradicted evidence is that Ms. Howden has no experience with these functions and, indeed, would be unlikely to excel in them given the restrictions on the use of her right arm.

As Brennan J. remarked in Van Allen v. London Life Insurance Co. [1999] O.J. No. 3813, quoting Bacon v. Saskatchewan 1990 CanLII 7404 (SK QB), [1990] S.J. No. 632:

The onus is always on the plaintiff on a balance of probabilities to establish that she is totally disabled within the definition of the Plan. Once the plaintiff has made out a prima facie case of total disability, (i.e. that her medical condition is such that she is likely incapable of substantially performing any reasonable occupation for which her training, education, or experience have fitted her), the onus shifts to the defendant to prove that there is such a specific occupation that the plaintiff is capable of substantially performing. The plaintiff is not required to prove a negative, (i.e. that she is not capable of performing each and every conceivable occupation that may be reasonable in the light of her background.)

I accept that, given the medical evidence of ongoing disability, and Ms. Howden’s and Mr. Katz’s evidence of the difficulties that she would have in performing any number of acceptable occupations in a remunerative manner, Ms. Howden has made, at the very least, a prima facie case for her disability beyond 104 weeks.

That said, the onus is on the Insurer to provide credible specific employment alternatives that would be within her capabilities, and fulfill the criteria set out by the Schedule.

The Insurer has provided some fifteen job descriptions which it, based on the two expert reports, claims Ms. Howden can do. As noted, both the expert reports and the Insurer operate on the assumption that Ms. Howden possesses significantly superior educational levels than she ever did attain in reality.

While Ms. Howden is not catastrophically impaired, she presents an unusual set of circumstances. Her training and aptitude are fitted for basically one type of employment. Her physical impairments make that employment unlikely, if not impossible.

While she clearly has some attributes, such as a good nature and a willingness to work hard, that could be transferable to other occupations, her primary, marketable skills remain those of the physically-challenging health care aide.

While the Insurer suggests that she could take a job and learn on the job, I accept Ms. Howden’s submission that, in light of her test scores and her employment history, she is unlikely to acquire new and marketable skills in such an informal manner.

Even if the employment alternatives proposed by the Insurer were based on accurate, dependable information, I accept Mr. Katz’s evidence that they remain highly improbable as practical alternatives for a person with the educational history and physical limitations of Ms. Howden.

While I have no doubt that with much improved numeracy and literacy skills Ms. Howden could ultimately perform clerical work that did not involve extensive keyboarding, without such skills upgrading, I find that she is not a candidate for any of the specific clerical positions suggested by Dr. Siegel.

I find, as well, that the Insurer has not met the onus of providing probative evidence, sufficient to convince me that Ms. Howden is capable of performing the occupations outlined in Dr. Siegel's report and the reports of Cameron Adams-Webber.

I find, therefore, that the Insurer, Pembridge, is responsible for the payment of ongoing income replacement benefits, past October 25, 2000, and that consequently the Insurer shall pay her the arrears of such payments, together with all accrued interest.

SPECIAL AWARD

In addition to the accident benefits specifically claimed, an arbitrator may also make a special award in certain circumstances. Subsection 282(10) of the Insurance Act, which provides for special awards, reads as follows:

If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

While a special award may be a sanction for inappropriate conduct by an insurer, it is not contingent upon bad faith, or the commission of an actionable wrong by the insurer. All that is required is an unreasonable withholding of payments that are due to an insured.

Black's Law Dictionary defines "unreasonable" as:

Irrational; foolish; unwise; absurd; silly; preposterous; senseless; stupid. Southern Kansas State Lines Co. v. Public Service Commission, 135 Kan. 657, 11 P.2d 985, 987. Not reasonable; immoderate; exorbitant. Cass v. State, 124 Tex. Cr. R. 208, 61 S.W.2d 500. Capricious; arbitrary; confiscatory. Harris v. State Corporation Commission, 46 N.M. 352, 129 P.2d 323, 328.

As Arbitrator Palmer noted in Plowright and Wellington (OIC A-003985, October 25, 1993):

"Unreasonable" behaviour by an Insurer in withholding or delaying payments can be seen as behaviour which was excessive, imprudent, stubborn, inflexible, unyielding or immoderate."

All of these definitions express the common sense of going beyond the limits of what is reasonable or a failure to be guided by reasons. An unreasonable action is neither fair nor moderate, nor arising out of sound judgement.

Ms. Howden claims that she should have been paid a benefit, on an ongoing basis, from a date commencing some 104 weeks after the first disability payment.

While, from a strictly financial viewpoint, the non-payment of benefits by an insurer may be eminently reasonable, an insurance company has obligations to more than its shareholders.

An insurance company also has a duty of good faith, to deal with its policyholders fairly. A policyholder has a contract with an insurer that envisages a payment in the event of the happening of certain circumstances. In Ms. Howden’s case, she was entitled to an income replacement benefit after 104 weeks if, as a result of an accident, she continued to suffer a disability that rendered her unable to engage in any suitable employment, as defined by the policy and the Schedule.

If she met the criteria, she would have a reasonable expectation to be paid the required benefit. Under such circumstances, the non-payment of a benefit would be unreasonable. In such a case, an arbitrator would be mandated by subsection 282(10) of the Insurance Act, to order a special award, his or her only discretion being the amount of the award.

As Juriansz J. stated in Clarfield v. Crown Life Insurance Co. 2000 CanLII 29045 (ON SC), 50 O.R. (3d) 696: "In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced or reasonable manner."

Ms. Howden, in claiming a special award, asserts that the Insurer did not assess the merits of the claim reasonably, and therefore withheld the payments unreasonably.

As noted earlier, the facts of Ms. Howden's disability were established quite early on. The Insurer had access to reports by its own physicians during the period of disability, including multiple reports by Dr. Peter Parker, the physiatrist.

In a report dated July 8, 2000, Dr. Parker stated that Ms. Howden's prognosis was poor, and that her condition would likely deteriorate. He also ventured the opinion that Ms. Howden would never be able to return to her own work, and would likely require re-training to enter the workforce. Dr. Pierre Kirwin, Ms. Howden's own physician, echoed Dr. Parker's comments at the time, as indeed do the majority of the medical reports available to the Insurer.

There is no evidence that the Insurer responded to Dr. Parker's recommendation of re-training.

Given that Dr. Parker's report was commissioned by the Insurer, and was sent to it for consideration, there can be no doubt that the Insurer had reliable knowledge that Ms. Howden would be a likely candidate for benefits post-104 weeks.

The FAE performed by Kendra Robinson also took place prior to the 104 week mark. Ms. Robinson concluded that working a light level would be possible for Ms. Howden. However, she cautioned:

It is important to note that observed limitations were noted in the lifting/carrying testing, and her biomechanical performance was observed to deteriorate prior to the termination of each test. Observed swelling around her right elbow upon completion of testing. Lorna Howden is able to work at a Light level of physical demands, however I do not feel she would be capable of carrying out a job that required any lifting and carrying.

Taken in conjunction with Dr. Parker’s concerns expressed in July 2000, it should have been apparent to anyone assessing Ms. Howden’s claim in a balanced and reasonable manner that this was a claim that had a significant risk of going beyond the 104 week mark.

The next step taken by the Insurer involved the commencement of the vocational assessment process with the appointment of Dr. Siegel.

The Applicant has alleged, in cross-examination of Dr. Siegel and in submissions, that the Insurer knew or should have known that the appointment of Dr. Siegel would necessarily result in a biassed and meaningless report. While I am content to find that Ms. Howden has produced no positive evidence of malice in the appointment of Dr. Siegel and the other assessors, the issue of malice is a red-herring and is not determinative of a special award.

Although, by the time of the hearing, it soon became evident that Dr. Siegel was not a paragon of assessors, there was no direct evidence, other than that of Dr. Siegel, that he worked almost exclusively for insurers that could support some sort of conspiracy theory on the part of the Insurer in choosing its assessors. Granted, neither the adjustor, nor anyone for the Insurer was called by either side to shed light on how the file was managed.

The Applicant did, however, file as an exhibit an arbitration decision issued by Arbitrator Alves - Bogojevski and State Farm Mutual Automobile Insurance Company (FSCO A97-001568, February 15, 2002). As part of her decision, the arbitrator summarized testimony by another psychologist, Dr. Doxey. The decision noted that, "Dr. Doxey testified that Dr. Siegel had been his intern. He described Dr. Siegel's report as "full of inconsistencies," and of "talking out of both sides of his mouth."

The summation continued:

Dr. Doxey testified that despite the existence of the other possible explanations and in light of the fact that Mrs. Bogojevski passed three tests to determine if she was cheating, Dr. Siegel nevertheless chose the interpretation that placed Mrs. Bogojevski in the most unfavourable light. In Dr. Doxey's opinion, Dr. Siegel's interpretation was "somewhat biased."

The above statement occurs in a public document, issued under the hand of an arbitrator, a member of this same tribunal. Although Arbitrator Alves includes the statements, and no doubt considers them relevant to her appreciation of the evidence before her, she makes no specific finding that Dr. Siegel was biassed. In addition, Pembridge, the Insurer in this matter, was not a party to or a privy to any party in the Bogojevski matter.

Clearly, there is no judicial finding, binding on the Insurer, that Dr. Siegel is consistently biassed. Even accepting the premise that the arbitrator's decision is admissible under the public document exception, it does not necessarily serve to prove the truth of Dr. Doxie's statements contained therein. Dr. Doxie was not subject to cross-examination by Pembridge, and it would be unfair to bind the Insurer to his opinions of Dr. Siegel's competency.

However, it is important to note that, as of the date of the hearing, and clearly by the date of the decision being issued by Arbitrator Alves, there were facts available, on the public record, concerning Dr. Siegel's reliability, that, if reviewed, ought to have raised questions on the part of the Insurer.

The Insurer is also known to have received evidence that contradicted some of Dr. Siegel's assumptions by June 2001. Cameron Adams-Webber notes having received Mr. Katz's February 22, 2001 report from the Insurer on that date.

Mr. Katz's first report stated that Ms. Howden attended Mearnsville Primary School in Jamaica, until age sixteen. It also notes the two Ontario grade 10 courses attempted, following her arrival in Canada. When the Insurer read this report, it should have noted the serious discrepancy between Mr. Katz's and Dr. Siegel's view of Ms. Howden's educational achievements.

The Insurer also had Mr. Adams-Webber provide comments on some of Mr. Katz's critique of the proposed employment for Ms. Howden. Mr. Adams-Webber's response was:

Regarding a grade 12 level of education Ms. Howden completed grade 12 in her native country and subsequently completed post secondary level education to qualify as a Health Care Aide. On this basis she is considered to have academic credentials superceding the grade level.

There is no evidence that either the Insurer or Mr. Adams-Webber made any enquiries into the reported educational discrepancy. Indeed, the report update merely references Dr. Siegel's original statement as a basis for its conclusions.

As noted, no one from the Insurer testified at the hearing with regard to its conduct in dealing with Ms. Howden. Contained in the record, however, is the affidavit of Doug Morgan, who states that he is the person responsible for the handling of Lorna Howden's claim. Mr. Morgan's affidavit was produced in the context of an application for interim benefits.

The document, dated June 15, 2001, states that Mr. Morgan had reviewed the Katz report. The motion record shows that both the original and a supplementary report were filed, each of which clearly referred to the primary schooling in Jamaica. Instead of addressing this discrepancy, Mr. Morgan saw fit to attack Mr. Katz's professional status, since he was a vocational assessor rather that a health practitioner and was, in the mind of Mr. Morgan, therefore, incapable of criticising a vocational assessment made by a psychologist.

It is clear that Mr. Morgan was aware of the educational discrepancies a significant time before the arbitration. It is also clear that he did nothing to address them, notwithstanding the fact that his expert's recommendations rested on Dr. Siegel's view of the qualifications.

Taken together, Dr. Parker's observations and recommendations, the knowledge attributed to Mr. Morgan of the differing opinions of Ms. Howden's skill set, and the combative attitude displayed in his affidavit suggest rather strongly that Mr. Morgan may not have assessed the claim in a balanced or reasonable manner.

As noted earlier, Mr. Morgan did not testify at the hearing, nor did the Insurer provide any evidence of the bona fides of its conduct, other than the broad assertion that the "insurer disagrees that its position was unreasonable or inflexible."

Lord Mansfield in Blatch v. Archer (1774), 1 Cowp. 63 stated:

It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.

Lord Mansfield's dictum has been interpreted by a long line of decisions recognizing what has been termed as a shifting of the secondary, or evidential burden of proof. This has been also referred to by some commentators as a tactical shifting of the burden of proof.

The effect has been that where matters are in the particular knowledge of another, and the claimant has adduced evidence, the defendant risks an adverse inference in the absence of evidence to the contrary. Sopinka J., although preferring an analysis based on inference rather than "burden of proof," agreed with the ultimate effect in Farrell v. Snell 1990 CanLII 70 (SCC), [1990] 2 S.C.R., 311, a decision of the Supreme Court of Canada.

In many malpractice cases, the facts lie particularly within the knowledge of the defendant. In these circumstances, very little affirmative evidence on the part of the plaintiff will justify the drawing of an inference of causation in the absence of evidence to the contrary.

I find that Ms. Howden has provided sufficient affirmative evidence of the unreasonable withholding of benefits by the Insurer as to require some sort of positive response from the Insurer. In the absence of testimony by Mr. Morgan, or anyone from the Insurer with knowledge of this matter, it is permissible to draw an adverse inference with regard to the reasonableness of the Insurer's failure to pay benefits to Ms. Howden, as they became due. Although, in my opinion, the direct evidence presented by Ms. Howden can support a special award, I find that there is also ample reason to draw an adverse inference from the failure of the Insurer to provide evidence concerning the adjustment of this file.

Even after the conclusion of the evidence, having heard Dr. Siegel backtrack on his report, counsel for the Insurer, presumably acting on the instructions of the Insurer, continued to exaggerate Ms. Howden's educational qualifications, maintaining that Ms. Howden's certificate course "can be properly construed as post-secondary education."

While, as noted, there is no direct, convincing, evidence of the malice alleged by Ms. Howden, I do find that the relationship between the Insurer and the insured had become frayed and difficult during the time that her claim for benefits, post 104 weeks, was being put forward. Perhaps because of this atmosphere of confrontation, the Insurer failed to deal responsibly with information that demanded a positive response and further investigation.

Had the Insurer properly investigated the issues raised by Mr. Katz concerning educational qualifications and the employability of Ms. Howden in 2001, it would not have had to proceed to a hearing in order to find out that its assumptions of employability were based on shaky foundations.

I find that an insurer, acting reasonably in adjusting a claim, would have, at the very least, launched an investigation into the underlying educational qualifications of Ms. Howden, once the Katz report was available to it.

It might, as well, have shown more diligence in the type of expert assessors it retained, knowing full well that expert reports are meant to be balanced, and founded in fact, rather than conjecture, laced with partisan advocacy.

I find, therefore, that, at the latest, by June 2001, the Insurer ought to have realized that it had based its assessment on erroneous assumptions, and that Ms. Howden's skill levels were much less than considered by either Dr. Siegel or Cameron Adams-Webber. The Insurer essentially closed its eyes to alternative, credible evidence that did not support its preconceptions. By failing to address that evidence the Insurer ceased to deal with the claim in a balanced and reasonable manner.

Consequently, the Insurer, by not paying benefits post 104 weeks, unreasonably withheld its benefit payments from Ms. Howden. Pursuant to subsection 281(10) of the Insurance Act, it should be subject to a special award.

In light of the clarity and the multiplicity of attempts by Mr. Katz to draw the attention of the Insurer to the inadequacies of the selected jobs, the contumacious approach taken by the Insurer, and the length and complexity of this unnecessary hearing, I find that the Insurer should be subject to a full special award of 50 per cent of the outstanding benefits, including accrued interest.

EXPENSES:

The parties made no submissions with regard to overall expenses. If they are unable to reach an agreement on expenses in this matter, an appointment may be made for an expense hearing.

In the context of the hearing, however, counsel for Ms. Howden raised the question of what he characterized as an outstanding, unfulfilled undertaking to pay for the production of certain documents, and requested that I order that the Insurer fulfill its undertaking. By letter dated October 4, 2001 directed to David Wilson, Grant Dow wrote:

Further to our telephone discussion of October 1, 2001 and your letter of September 26, 2001, I confirm the insurer's agreement to pay for the reasonable cost of obtaining those records requested by the insurer in my letters dated June 5 and June 26, 2001 (and agreed to by your agent at the pre-hearing). Your letter infers that you have the records and to this extent please comply immediately.

Subsequently, on October 9, 2001, David Wilson wrote to Grant Dow, enclosing the requested material, together with an invoice.

On October 11, 2001, Mr. Dow replied, with further requests, and stated that "I have forwarded your request for payment to my client and hope to have funds to you in the next few days."

The Insurer, through Mr. Dow, sent only a portion of the amounts claimed. Mr. Dow characterized the refusal as follows:

As can be seen, the difficulty that has arisen is that counsel for the insured clearly had possession of the above-requested records (presumably for his own purpose) well before the Insurer made a request for same. There was no disclosure of this or request for clarification upon the insurer's request for the records, at the Pre-Hearing, in follow-up or when the issue of payment was raised.

Mr. Dow's submissions stand in sharp contrast to his letter of October 4, in which he recognized that Mr. Wilson likely had the documents on hand. Notwithstanding this observation, Mr. Dow, on October 11 still hoped to have the funds to Mr. Wilson "in the next few days."

I have no doubt that Mr. Wilson asked for payment of the costs of the document, and that Mr. Dow agreed that they were to be paid. For some reason, after October 11, either he or the Insurer unilaterally decided not to honour the promise to pay.

The Dispute Resolution Practice Code (4^th Edition, May 31, 2001), although it deals with the breach of production orders, does not address the question of breach of other undertakings. Both Messrs. Dow and Wilson, however, are lawyers and subject to the guidance of the Law Society of Upper Canada on such matters.

The current Rule 4 of the Rules of Professional Conduct of the Law Society states at subrule 7:

A lawyer shall strictly and scrupulously carry out an undertaking given to the tribunal or to another lawyer in the course of litigation.

The following Commentary appears with the Rule:

Unless clearly qualified, the lawyer's undertaking is a personal promise and responsibility.

While it is not clear what transpired orally at the time the original agreement was made, the October 4, 2001 letter from Mr. Dow confirmed "the insurer's agreement to pay for the reasonable cost of obtaining those records." I accept that Mr. Dow made a promise on behalf the Insurer, and not as a personal undertaking.

Even if Mr. Dow was found to have made the personal promise to pay for the documents, I find that I would have no jurisdiction to directly enforce such a solicitor's undertaking. The principles behind the enforcement of a solicitor's undertaking were outlined by Nicholls L.J. in Fox (John) v. Bannister, King & Rigbeys [1988] 1 Q.B. 925 (Eng. C.A.):

The basic principles applicable in the present case are not in doubt. The jurisdiction being invoked here is the inherent jurisdiction which the Supreme Court has over solicitors, which are its officers. It is a jurisdiction which is exercised, not for the purpose of enforcing legal right, but for the purpose of enforcing honourable conduct on the part of the court's own officers: see In re Grey (H.A.) [1892] 2 Q. B. 440, per Lord Esher M.R.

This tribunal has no inherent jurisdiction over solicitors or anyone else. While the right of the tribunal to control its own process may confer some power over the conduct of agents and lawyers at the Commission, the discipline of a solicitor for breach of duty committed as an officer of the court is not one of them. The appropriate forum to deal with an alleged breach of an undertaking by a solicitor, outside of the courts, is the Law Society, not the Commission.

That is not to say that the Commission must condone the repudiation of undertakings between parties. Rule 34 of the Dispute Resolution Practice Code provides penalties for "failure to comply." These range from an order to pay expenses, the exclusion of a document, the imposition of a new production timetable, or the drawing of an adverse interest against a party.

Although the section specifically relates to failure to produce a document pursuant to an order or agreement, Subrule 1.2 of the Practice Code provides:

Where something is not specifically provided for in these Rules, the practice may be decided by referring to similar Rules in this Code.

I find that, since the issue in dispute arises out of a production agreement, reference to the sanctions in Rule 34 is appropriate. Although both parties have indicated that they would prefer to make submissions on overall expenses at a later date, both did, in fact, make representations on this issue. I, therefore, will make an interim expense order, subject to the ultimate disposition of the question of expenses.

I accept that Pembridge resiled from an agreement with Ms. Howden's counsel to pay certain expenses in return for the production of the documents in question. Whatever reasons the Insurer later articulated for its repudiation of the agreement, I find that Pembridge had an unconditional obligation to pay for the costs of those documents, once they were produced.

To find otherwise would be to set an unfortunate precedent which would render the process of documentary discovery virtually impossible. Pembridge, therefore, shall forthwith pay to counsel for Ms. Howden the sum of $363, being the outstanding amount that the Insurer had undertaken to pay for the production of the documents. Since the outstanding amount is not a benefit as outlined in section 46 of the Schedule, I make no order as to interest.

October 16, 2002

John Wilson

Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 161

FSCO A01-000333

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LORNA HOWDEN

Applicant

and

PEMBRIDGE INSURANCE COMPANY (PAFCO INS. CO.)

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Pembridge shall pay to Ms. Howden the income replacement benefits due to her post 104 weeks, plus accrued interest on all outstanding amounts.

2. Pembridge shall pay to Ms. Howden a special award of 50 per cent of the outstanding benefits, including accrued interest.

3. Pembridge shall pay to Ms. Howden $363 as fulfilment of its outstanding production agreement made prior to the hearing.

October 16, 2002

John Wilson

Arbitrator

Date

Footnotes

1. 1Decision on motion to re-open hearing issued September 23, 2002.
2. 2The 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, 303/98 and 114/00.