Neutral Citation: 2002 ONFSCDRS 94

FSCO A97-000647

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

PINA COLES

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Nancy Makepeace

Heard:

January 29, April 9, 10, 11, 12, 19, July 30, 31, August 1, 2, and September 14, 2001, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Jeremy Solomon for Ms. Coles

Kevin Mitchell for Dominion of Canada General Insurance Company

Issues:

The Applicant, Pina Coles, was injured in a motor vehicle accident on October 30, 1990. She applied for and received statutory accident benefits from Dominion of Canada General Insurance Company ("Dominion"), payable under the Schedule.¹ Dominion terminated weekly income benefits at the end of October 1993. The parties were unable to resolve their disputes through mediation, and Ms. Coles applied for arbitration at the Commission² under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Ms. Coles entitled to weekly benefits under s.12(5)(b) of the SABS-1990 from November 1993 and ongoing? Dominion concedes that Ms. Coles is entitled to weekly benefits for 156 weeks under s.12(1) of the SABS-1990.

2. What is the amount of weekly income benefits payable?

3. Is Ms. Coles entitled to interest under s.24(4) of the SABS-1990?

4. Is Dominion entitled to repayment of benefits under s.27 of the SABS-1990?

5. Is Ms. Coles entitled to a special award under s.282(10) of the Insurance Act?

Result:

1. Ms. Coles is not entitled to weekly income benefits, under s.12(5)(b), after November 1993.

2. Ms. Coles' benefits from The Citadel Assurance and the Dominion Automobile Association are not deductible from her weekly income benefits under s.12(4)(b) of the SABS-1990. She is entitled to $600 per week for 156 weeks, totalling $93,600, less the benefits already paid ($41,342.79), for a principal sum of $52,257.21.

3. Ms. Coles is entitled to interest on the amount owing under paragraph 2 above, commencing October 15, 2001, in accordance with s.24(4) of the SABS-1990.

4. Ms. Coles is not entitled to a special award.

5. Dominion is not entitled to repayment of benefits.

6. If the parties are unable to agree about arbitration expenses, the Commission may be contacted pursuant to Rule 77 of the Dispute Resolution Practice Code - Third Edition (April 15, 1997) (the "Code").³

EVIDENCE AND ANALYSIS:

Litigation History

After the accident of October 30, 1990, Ms. Coles received benefits from The Citadel Assurance ("Citadel") and the Dominion Automobile Association ("DAA"), as well as weekly income benefits from Dominion.⁴ Until November 1992, Ms. Coles' collateral benefits exceeded 80 percent of her pre-accident gross weekly income, relieving Dominion of any responsibility to pay weekly income benefits. When Ms. Coles' collateral benefits ceased, Dominion reinstated weekly income benefits after recovering an overpayment. Dominion ultimately terminated Ms. Coles' weekly income benefits at the end of October 1993, 156 weeks after the accident, relying on s.12(5)(b) of the SABS-1990.

Section 12(1) of the SABS-1990 states that an insured person is entitled to weekly income benefits during the period when she "suffers substantial inability to perform the essential tasks of his or her occupation or employment." This is qualified by s.12(5)(b), which states:

12. (5) 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.

The entitlement test under s.12(5)(b) is more stringent than the s.12(1) test in two ways. The insured person must establish not only that she is substantially unable to work because of her injury, but also that her injury "continuously prevents" her from working. Secondly, the insured person must establish that she cannot work at any suitable job (sometimes called the "any job" test), not just the job she did before the accident (sometimes called the "own job" test).

Ms. Coles applied for mediation, followed by arbitration of her claim for post-156 week benefits. In February 1995, Arbitrator Palmer found that the "156 week" period described in s.12(5)(b) was extended by the period during which Ms. Coles received benefits under her disability policies but did not receive any benefits from Dominion. She concluded that the phrase "for any period in excess of 156 weeks" refers to "156 weeks of payments," rather than "156 weeks of disability" or "156 weeks from the date of the accident." Therefore, the test under s.12(1) of the SABS-1990 continued to apply. The arbitrator found that Ms. Coles was substantially unable to return to her pre-accident work as a result of her accident-related injuries, and therefore she was entitled to benefits until the date of the decision, plus interest and arbitration expenses. Ms. Coles' claim for a special award was denied.⁵

Arbitrator Palmer was unable to calculate the exact amount to which Ms. Coles was entitled, and left it to the parties to do so. They were unable to agree. In a supplementary decision, the arbitrator ordered Dominion to pay Ms. Coles arrears of $27,460.78 owing to the date of the first order, plus interest under s.24(4) of the SABS-1990.⁶

Dominion appealed. Director's Delegate Naylor considered the competing cases interpreting s.12(5)(b), and concluded that "156 weeks" means "156 weeks of disability." Since Ms. Coles claimed to have been disabled continuously since the accident, the stricter post-156 week test applied to her claim for additional weekly income benefits after November 1993. In July 1997, Delegate Naylor allowed the appeal and remitted the matter to the arbitrator for redetermination in accordance with the appeal order.⁷

Ms. Coles applied for judicial review of the appeal decision. On May 18, 1999, the Divisional Court dismissed the application, ruling that Delegate Naylor's interpretation was correct: "[i]n our view, the reference is to 156 weeks of 'substantial inability.'"⁸

Accordingly, the issue, in this second arbitration hearing, is whether Ms. Coles is entitled to benefits, under s.12(5)(b) of the SABS-1990, after November 1993. The hearing was scheduled to be held over four days, January 29-February 1, 2001. However, the parties raised a number of production and other preliminary issues on the first day, necessitating an adjournment until April 9, 2001.⁹

The Issues

Before the accident, Ms. Coles was a self-employed dressmaker and designer. She was 41 years old, the mother of three almost-grown children, and twice divorced. By all accounts, she had overcome a number of serious problems to become successful in her business, and she was able to support herself with her work. On October 30, 1990, her car was rear-ended in a low-speed chain reaction collision. Although Ms. Coles has earned some income from dressmaking in most years since the accident, she has not returned to work on a sustained or full-time basis. She claims that she cannot work because of injuries resulting from the accident, especially diffuse soft tissue pains, headaches, sleep problems, and depression. She has been diagnosed with fibromyalgia, chronic pain syndrome, post-traumatic stress disorder and depression. Witnesses for Ms. Coles were her daughter, Lisa; her family doctor, Dr. M. Weinstock; Dr. A. Amies, a physiatrist, and Robert Katz, a social worker who specializes in vocational rehabilitation.

Dominion questions Ms. Coles' credibility and her motivation to return to work. It relies on surveillance evidence and Ms. Coles' own reports to her doctors to show that she has fewer functional limitations than she admits. The Insurer submits that Ms. Coles' accident injuries resolved soon after the event, and that any remaining problems are attributable to unrelated family and financial problems that have troubled Ms. Coles' since the early '80s. Dominion's witnesses were Dr. H. Berry, a neurologist; Dr. S.M. Liao, a physiatrist; Dr. S. Ozerski, a psychiatrist, and Dr. K. Craven, an occupational medicine specialist.

Suitable Employment

Ms. Coles must prove that her accident injuries continuously prevent her from engaging in any occupation or employment for which she is reasonably suited by education, training or experience.¹⁰ Ms. Coles has limited education, and she worked as a dressmaker and designer for at least 20 years before the accident. Although an early labour market survey commissioned by Dominion identified retail trade manager as an alternative occupation, Dominion's case rested mainly on its view that Ms. Coles' injuries do not continuously prevent her from engaging in work as a dressmaker or designer. I accept the evidence of Robert Katz, a social worker who specializes in vocational rehabilitation, that Ms. Coles' business administration skills are not transferable to any other business. I find that the only work for which Ms. Coles is reasonably suited is work as a dressmaker or designer.

Ms. Coles testified that before the accident, she did a lot of work for wedding parties, with strict deadlines. Because of the cost of custom-made garments, clients are demanding. The fabrics used, especially leather and suede, are expensive and hard to work with, and Ms. Coles had to bear the cost of any mistakes. The process is time-consuming. I accept Ms. Coles' testimony that her duties included: talking with the client, giving advice about fabric and design, getting her instructions, taking the client's measurements, making a draft paper pattern, making a canvas prototype garment, doing the primary "rough" fitting of the prototype, cutting the fabric from the prototype, basting the garment, sewing in the lining, meeting the client for the second fitting, adding facings and finishing, and meeting the client for the final fitting and checking. I accept Ms. Coles' evidence that she was continually involved in the hands-on work, though she sometimes employed assistants or apprentice seamstresses. I also accept that she worked long hours to demanding deadlines, and that her business was successful.

According to Ms. Coles, her physical demands included working with dressmakers' scissors (12-14" long); lifting bolts of fabric, leather and suede, in varying weights; pressing garments with a commercial steam iron; and assembling and finishing garments weighing about 5-15 lbs. I accept the Job Demands Analysis prepared by FIT for Work, which indicates that the physical requirements of her work included

extended sitting and standing, static below shoulder reaching, continuous handling and fine finger movements, and reaching above shoulder and overhead on an occasional basis. In addition, Ms. Coles required a good exercise tolerance and level of mental alertness, since she was involved in her business up to twelve hours a day. In addition to performing the actual designing and sewing aspects of the business, Ms. Coles also met with clients and performed all administrative and public relations aspects of the business.

Dr. Kenneth Craven, an occupational medicine specialist who conducted a work capacity evaluation of Ms. Coles at Dominion's request, testified that dressmaker is classified as a light duty occupation, requiring occasional lifting of 20 pounds maximum and frequent lifting and carrying of up to 10 pounds. However, he concluded that this "likely underestimates the physical demands of Ms. Coles' previous work as owner/operator of a fashion design and dressmaking business. She previously lifted and carried bundles of leather and suede that likely weighed more than 20 pounds, which would fall in the category of medium physically demanding work."¹¹

An insured person claiming post-156 week benefits is not entitled to "hold out for" exactly the same work she did before the accident. "Suitable" work is work that is comparable in nature, status and remuneration. What is "suitable" differs from case to case, depending on the entirety of the insured person's circumstances. Ultimately, the question is one of reasonableness.¹²

Ms. Coles' pre-accident work history embraced a range of dressmaking work from alterations to garment production to clothing design, but comparable duties need not embrace the entire range. I find that "suitable" work for Ms. Coles includes work as a dressmaker, and need not involve design work or work with heavier materials.

Ms. Coles' Evidence

On October 30, 1990, Ms. Coles was driving her car when she was rear-ended while braking for a light on Avenue Road in Toronto. A second impact pushed her car into the car ahead. The police report confirmed that the four-car chain reaction collision occurred as described by Ms. Coles. Ms. Coles described the initial impact as like "a big bomb exploding." Her head flew back and forth with both impacts.

She was taken by ambulance to Sunnybrook Hospital. She testified that she had pain all over, could not breathe, and was crying and groaning. The hospital's emergency record indicates she complained of neck and back pain after a minor collision. Cervical and thoracic spinal x-rays were normal except for minor pre-existing degenerative changes in the lower cervical spine. Ms. Coles also complained of abdominal pain, but tests were negative. She was given Tylenol 3 and discharged to the care of her family doctor, Dr. S. Mahata.

Ms. Coles saw Dr. Mahata the next day, complaining of right neck pain and right lower back pain radiating to her right leg, as well as abdominal pain and pain in her right wrist and right knee. Dr. Mahata diagnosed myofascial strain of the cervical, dorsal and lumbosacral spine, finding moderate restriction of movement. She also diagnosed strain of her right arm and right leg, headaches, abdominal contusion and probable contusion of the internal organs. She prescribed analgesics, muscle relaxants and physiotherapy. Follow-up tests relating to the abdominal signs were negative.

Ms. Coles testified that by the end of 1990, she had not improved, and she was having difficulty sleeping. She began to worry about her lack of progress. Dr. Mahata noted her anxiety and depression. In early 1991, Ms. Coles switched family doctors, and started seeing Dr. Michael Weinstock. He continues to act as her family doctor, though he has seen her less often since 1995.

Dr. Weinstock's notes indicate that Ms. Coles' complaints are little changed since she first saw him: low back pain, neck pain, headaches, sleep disturbance, fatigue and depression. She has also complained of pain in her right leg, her right arm, and pain in her shoulders and wrists. Dr. Weinstock diagnosed post-traumatic fibromyalgia, headaches and depression. He prescribed analgesic, anti-inflammatory, muscle relaxant, and anti-depressant medications, as well as physiotherapy, and he referred her to a number of specialists, including Dr. Z.D. Fulgosi, a psychiatrist, Dr. L.R. Perlin and Dr. R. Shupak, rheumatologists, and Dr. S.G. Esmail, a neurologist.

In Dr. Weinstock's opinion, Ms. Coles has at all times remained substantially unable to work as a dressmaker and designer, or in any other occupation, including sedentary work, because of her need to change position frequently, her constant pain and her limited endurance. He concedes that she has good days and bad days, but feels she could not even work part-time, evidenced by her failed attempts to do so.

Ms. Coles also began seeing Dr. Fulgosi, a psychiatrist, in late February 1991. Dr. Fulgosi's report of September 1991 records Ms. Coles' complaints of bodily pains, daily headaches, depression, anxiety, hopelessness about her future, "intractable insomnia with fatigue and loss of energy," and frequent dizziness. He felt this clinical picture was consistent with post-traumatic stress syndrome, post-traumatic fibromyalgia and chronic depression.

Dr. Shupak, a rheumatologist, assessed Ms. Coles, on referral from Dr. Weinstock, in June 1991. She reported that "functional enquiry" was negative, based on Ms. Coles' report that she was able to look after herself and her children, volunteered several hours a week in church activities, and could walk. Ms. Coles did report that she had someone to look after her housework, could not drive, and that her low back and interscapular area became painful after several hours of sitting. She also complained of headaches, difficulty falling asleep, and multiple bodily pains. On examination, the only positive sign was moderate tenderness in the neck and shoulders. Dr. Shupak found that Ms. Coles was not "floridly fibrositic." She diagnosed myofascial strain of the trapezius and rhomboid, and cervical tenderness, neither severe. She recommended neck mobilization, adequate neck support and an exercise program, and advised Ms. Coles "to gradually resume all normal activities as she best can."

Dr. Weinstock then referred Ms. Coles to Dr. Perlin, who assessed her in February 1992. Ms. Coles complained of a number of symptoms, including pain all over, poor sleep, fatigue, morning headaches, poor concentration and forgetfulness, and anorexia.¹³ Dr. Perlin diagnosed chronic pain syndrome "manifested by the diffuse aching, typical tender points and abnormal sleep pattern compatible with the specific diagnosis of fibromyalgia." She recommended a number of treatments, including anti-depressants, aerobic exercise, analgesics, use of a cervical ruff at night, massage, and relaxation techniques. Initially, she was hopeful that Ms. Coles would be able gradually to return to work, avoiding prolonged sitting, taking frequent breaks and perhaps getting help with heavy lifting.

Dr. H. Stancer, a psychiatrist who assessed Ms. Coles in November 1991 at Dominion's request, agreed that Ms. Coles was depressed, based on her complaints of crying bouts, headaches, difficulties falling and staying asleep, weight loss and concentration problems. He suggested that the depression and physical symptoms might be interacting in a vicious cycle, particularly given the demanding nature of Ms. Coles' pre-accident work. He recommended that Ms. Coles' Elavil prescription be increased. Despite Ms. Coles' depression, Dr. Stancer reported that she planned to try to return to her usual work by March 1992.

Dr. Weinstock referred Ms. Coles to FIT for Work Centres, where she was initially assessed in September 1991. She complained of headaches, bilateral neck and shoulder pain, mid-thoracic pain and low back pain. FIT identified physical, functional and psychosocial deficits that were preventing her from returning to work. They recommended an active rehabilitation program, which Ms. Coles completed in October and November 1991, as well as an ongoing gym program.

The FIT assessors noted that Ms. Coles frequently cited the spring of 1992 as a target date for returning to work. They felt she would be able to proceed with a partial return to work, but only for 8 hours a day, contrasting with her pre-accident reported workday of 12 hours. They recommended that she obtain an ergonomic chair, a table with adjustable height and adjustable angle, and a foot stool. Dr. Weinstock followed up on these recommendations in a letter to Ms. Coles' solicitors on November 29, 1991. Ms. Coles testified that Dominion provided the chair, but while a claim was submitted for the table, this was never purchased because her condition was getting worse.

Ms. Coles' doctors recorded her ongoing complaints. In late March 1992, a year after starting treatment, Dr. Fulgosi reported to Citadel that Ms. Coles had sustained only "mild - not substantial" improvement and was still totally disabled. He could not predict when she would be able to return to work. In November 1993, Dr. Fulgosi reported to Ms. Coles' solicitors that Ms. Coles remained totally incapacitated, her diagnosis remained unchanged, and a chronic pattern had developed, making prognosis for full recovery more guarded. In April 1994, the last time he saw her, Dr. Fulgosi reported that despite taking the anti-depressant, Zoloft, for the previous six months, Ms. Coles' insomnia and depression had not responded in any significant way.

In October 1993, Dr. Weinstock reported that it was "highly unlikely that Ms. Coles would be able to return to any type of occupation similar to her pre-accident occupation where there is a time limit or repetitive or heavy lifting motions." He restricted her from engaging in any repetitive motions or lifting "more than a few pounds." Dr. Weinstock's opinion has not changed since then. Similarly, Dr. Perlin had little more to offer when she saw Ms. Coles again in March 1993 and November 1993.

In late 1993, at her lawyer's request, Ms. Coles was assessed by Robert Katz, a professional social worker who specializes in vocational assessment and rehabilitation. Mr. Katz assessed her in late 1993. Relying on an interview with Ms. Coles and a review of her doctors' reports, Mr. Katz concluded that Ms. Coles could not maintain competitive employment or self-employment at that time:

From a physical point of view, she would not be able to work for an employer unless she were permitted to leave early, when her pain experience was at its most intense. She would also have to alternate between standing and sitting whenever one or the other position became too onerous for her. From a psychological point of view, she could not cope with the strain of production work, even in a co-operative, beneficent workshop setting.

Mr. Katz pointed out that as a self-employed dressmaker, Ms. Coles would have some flexibility in taking on small contracts and working at home on her own hours. However, he also stated that Ms. Coles would be less suited to resume her business than to return to employment. He felt she might be able to work on an occasional, flexible basis.

Mr. Katz feels that Ms. Coles is highly motivated to return to work. In fact, he suggested that her perfectionism is a barrier for her, because her fear of not being able to meet customer demands discourages her from taking on work. When she told him she sews a bit at home, he encouraged her to do some sewing work every day, starting with a few small items for him. She did not do so. Mr. Katz testified that she told him she had bought the fabric, but was too depressed to do so. He testified that he was trying to break Ms. Coles' "cycle of inactivity," but lost that battle due to her depression. He recommended that she continue to have therapy with Dr. Fulgosi for her depression, and begin a vocational rehabilitation program.

Ms. Coles testified that she was especially limited in her activities for the first five years or so after the accident. As a Jehovah's Witness, she was very active with her church before the accident, spending many hours a week attending services and meetings, and in door-to-door teaching. After the accident, she attended services only every other week or so, attended special assemblies only on a half-time basis, and did not canvass at all, until late 1995 or so. She testified that she is doing a little better in the last few years, attending most meetings, and staying at least part-time at special assemblies, although she must take two Tylenol 3’s to manage her pain, and she still cannot do much formal teaching.

Ms. Coles testified that walking has never been her strength, and long walks give her leg cramps, but she does take short walks, including walking the family dog. She was also unable to drive for the first few weeks after the accident because of pain. She testified that she started driving again because she was worried about becoming dependent. She enjoys driving, but finds it physically strenuous, and she is tired by the end of the day. She has always done her grocery shopping, but she points out that she can choose when to do this, and she does it only when she feels up to it.

Ms. Coles testified that she was angry and depressed when Dominion terminated her benefits. She felt they abandoned her without explanation, at a time when she felt her disability was getting worse. This started a roller coaster of seclusion and depression that lasted three or four years. Losing her business as a result of the accident, and then losing her benefits, caused great financial hardship. She has had to accept welfare benefits, and her financial difficulties have forced her to move a number of times.

Ms. Coles feels that she could not work as a dressmaker, even part-time, because she cannot work consistently or reliably, and therefore could not meet clients' deadlines. Although she has managed small occasional dressmaking jobs over the years, mostly for family and friends, her attempts to return to paid work failed because of her pain, fatigue and lack of endurance.

Her most sustained attempts to work began in 1997. That year, she started accepting alteration work, eventually earning $600-700 a month gross. In the summer, she started a two-year fashion design course at the International Academy of Design on Carlton Street. She received an Ontario Student Assistant Plan loan. Her courses were three full days a week. Her transcript indicates that she passed sewing and pattern-making courses in the first term, but failed the designing course. Ms. Coles explained that it required a great deal of reading, math and art. In the second term, she passed draping, sewing and pattern-making, but failed fashion illustration.

Ms. Coles was warned about lateness and absenteeism in the second (fall) term. She was unable to continue with the third term, and quit the program in early 1998. While she went to school, she continued with her alteration work, working here and there through the day, for 8 to 10 hours a week. She stopped working in December 1997. Ms. Coles attributes her problems to her seasonal problems with pain and mood: she has more pain and is more depressed in the wintertime. She testified that her body "totally collapsed" in the winter of 1997. She could visit a friend or her daughter, but found it very hard to do anything serious.

In February 1998, Ms. Coles was evicted from her Carlton Street apartment for not paying her rent. She put her things in storage, and moved in with her daughter, Lisa, for two or three months. She did not work during this time.

In April, she rented a house on Wilson Avenue that had previously been used as a hair salon. She did what she could to make the house suitable for home and work. She earned about $2,000 gross per month, mostly from walk-in clients. She testified that she worked three or four hours a day. In response to her lawyer's question, she explained this was not consecutive. She became more depressed in November and December. In 1998, Ms. Coles also earned $368 from Joy Cherry, a clothing boutique. She testified that this was earned just before Christmas, when she worked three full days per week for two weeks. According to Ms. Coles, she was terminated because of her use of medications and because she could not offer more hours.

Ms. Coles paid only half her rent in December, and in January 1999, she moved in with Lisa, where she remains. Ms. Coles testified that this was the last time she tried to operate her own business, and she has put her equipment into storage. She reapplied for family benefits. However, in the spring of 2000, Ms. Coles agreed to make four bridesmaid's dresses for a summer wedding. Ms. Coles testified that she was only able to do this work because she had several months notice, and her customers knew about her problems. She can only sit and hand-sew for about a half hour at a time, and this is "never without discomfort." She estimated she worked about three hours a day in total. She testified that she grossed about $2,000, and materials cost about $300-400.

Between September 2000 and June 2001, Ms. Coles worked for a bridal boutique in Oakville. She testified that the location was about 20 minutes from her home on the QEW, so that she could avoid driving on the 401. According to Ms. Coles, her employer agreed to give her flexible hours in recognition of her problems. Ms. Coles earned $300-400 every two weeks, for about 30 hours work. She could not work every day. On a good day, she could work four hours, but she would not be able to go in the next day. She feels she worked slowly, and she could not do much cutting because the big scissors hurt her hand. She also had difficulty focussing. Her work involved pattern-making, sewing, and restoring wedding gowns. At her counsel's prompting, she added that she needed painkillers to get through the work day, taking Tylenol 3 every two or four hours. At the end of the work day, she would feel totally exhausted, and would go to bed right away. According to Ms. Coles, her employer began pressuring her to increase her hours, because the shop was getting busy.

At the time of the hearing, Ms. Coles testified that her medications were Zoloft, Tylenol 3, Surgam, an anti-inflammatory, and Ranitidine (which protects the stomach from the effects of the anti-inflammatory). Apart from medication, she has also been treated with physiotherapy and massage, and she continues to engage in a regular exercise program. Ms. Coles testified that her symptoms are essentially unchanged since the accident, although her depression and sleep problems have responded to Zoloft. However, she is still unable to sleep for more than a couple hours at a time, and wakes up early. She no longer has nightmares, as she did immediately after the accident, but is woken by cramps in her right leg and foot. She is stiff and has pain all over in the morning, and has to take two Tylenol 3’s to begin her day. As a result she is unable to get going before 10 or 11 a.m. She gets through her personal chores with effort and painkillers. She has trouble concentrating, remembering numbers or making decisions. Her symptoms are worse in cold and wet weather.

Ms. Coles' daughter, Lisa, corroborated her mother's testimony about the effects of the accident. She has been able to observe her mother especially closely in the last two years since her mother moved in with her. She testified that her mother takes a lot of medications, has constant headaches and bodily pains, and lacks her former energy and strength. Lisa described her mother as "emotionally ruined." In particular, she spoke of her mother feeling degraded by her current lifestyle, not being able to work, not being able to pay rent, and being forced to accept welfare benefits. In Lisa's opinion, Ms. Coles cannot do her household chores, and Lisa does not believe she could work more than limited part-time hours. For example, she said her mother would be "knocked out" on Thursday, if she worked Tuesday and Wednesday. She corroborated her mother's testimony about her reasons for quitting the job in the bridal boutique, and testified that when her mother last tried to work for herself on Wilson Avenue, she was unable to please her clients the way she had before.

Dr. Arthur Ameis, a physiatrist, assessed Ms. Coles for medical-legal purposes in December 2000. Ms. Coles complained of morning stiffness, multiple bodily aches and pains, headaches, seasonal depression, interrupted sleep, and difficulty concentrating. She reported that she had been working at the bridal boutique since September, on a flexible basis, working 10-12 hours a week, but working only five or six days in November, because of illness. Otherwise, she attended religious meetings lasting one or two hours several times a week, attended at gym on an irregular basis, and walked the family dog in the morning. Dr. Ameis observed that Ms. Coles exhibited "marked somatic preoccupation," "poor insight" and anxiety. On examination, he found no signs of physical impairment. He applied "the descriptive term, Chronic Pain Syndrome," to Ms. Coles, defined as the absence of objective findings, a disproportionate preoccupation with symptoms, interfering with function, and persistence of symptoms for longer than six months. Dr. Ameis felt a seasonal affective disorder was possible. He did not think Ms. Coles would ever return to full employment, "or that even part-time employment will be consistent throughout the work week or work year. A very flexible schedule is required." He felt Ms. Coles would not have been disabled "but for" the accident.

Analysis and Conclusion

I accept that Ms. Coles suffered residual symptoms resulting from the accident for some time afterwards. However, I am not satisfied that her accident-related injuries continuously prevent her from working as a dressmaker after November 1993.

Despite Ms. Coles' description of the accident, I find it was a minor accident at low speed. Her car was repaired for $1,220. I am unable to see any damage in the colour photographs of her car, but the appraisal suggests there was a little damage to both bumpers. Ms. Coles does not claim that she suffered any traumatic injury, apart from the abdominal contusion, and soft tissue complaints were her main complaints in the first weeks and months after the accident.

Ms. Coles relies on her doctors' diagnoses of fibromyalgia and chronic pain syndrome. Neither diagnosis guarantees or precludes entitlement. The question is whether Ms. Coles suffers symptoms resulting from the accident that continuously prevent her from engaging in suitable work:

Where there is no objective evidence of impairment, or the objective evidence does not explain the degree of pain reported by the insured person, the insured’s credibility becomes important. In assessing the insured person’s subjective pain complaints, Arbitrators consider all of the circumstances, including the consistency of the insured person's complaints and apparent functional level.¹⁴

Ms. Coles main problem is that her claimed disability is inconsistent with the surveillance material prepared between December 1992 and April 1994.

There are dangers in relying too heavily on surveillance evidence. The investigator cannot observe the subject resting after a period of activity, and cannot photograph pain. The camera is also insensitive to the necessity for the observed activity; an injured person who needs to see her doctor, lawyer, or therapist has no choice but to leave her home and manage her pain or limitations as best she can. And because surveillance is usually intermittent and of short duration, it is generally a poor predictor of performance in the workplace, with its demands of reliability and sustained productivity. For these reasons, surveillance evidence must be assessed in the context of the evidence as a whole and weighed accordingly.

However, surveillance can provide an objective contemporaneous snapshot of what a person could do at a given moment on a given day. It is especially helpful in the absence of other objective contemporaneous evidence of disability. At the outset of this hearing, in the context of the production motion, I commented that the surveillance evidence was likely to assume unusual importance in this case because of the length of time that has elapsed since the accident. At the end of the day, the surveillance evidence was crucial, because it contradicts Ms. Coles' reports about her functional level. Particularly significant are observations of Ms. Coles on four days. On December 3, 1992, she was active between 11:30 and about 2:50 p.m., when surveillance ended. On December 22, 1993, she was active for 2 ½ hours. On January 4, 1994, she was active between 11:00 a.m. and 4:00 p.m., when surveillance was discontinued. On April 20, 1994, she was active between 11:45 a.m. and 6:00 p.m., when surveillance was discontinued.¹⁵

On each of these occasions, Ms. Coles drove from Mississauga to Toronto to do a number of errands. She is observed carrying her purse over her left shoulder, and is also seen carrying what appears to be a gym bag. She wears cowboy-style boots with a moderate heel. She explained that dressing from head to toe is expected in her culture, and that she did not want her feet to become unused to heels. That may be, but her ability to walk briskly, without any sign of pain or effort, indicates that her residual symptoms did not require even the easy accommodation of wearing flat shoes. Ms. Coles is shown walking to and from her car, getting into and out of the car, driving, bending while outside the car to handle or pick up various parcels on the passenger seat or in the back seat, walking quickly along the street to various buildings, turning her neck from side to side while walking and driving, and rotating her trunk. She moves quickly and fluidly. On April 20, 1994, she picks up a small particle-board cabinet from the sidewalk and puts it in her car. Ms. Coles testified she used the cabinet to store shoes. At all times, she appears to have a full range of neck, back and shoulder movement. She shows no sign of pain or effort, even at the end of the period when she is active. This makes it difficult for me to believe that she was forced to rest afterwards, or could not have extended her activities.

Other evidence suggests these observations are not misleading. In late 1991, about a year before the first surveillance material was prepared, Ms. Coles FIT assessors endorsed her stated intention of attempting a return to work in early 1992. This plan was serious enough to merit a claim for an ergonomic work table and chair. Dr. Weinstock and Dr. Stancer also recorded Ms. Coles stated plans to return to her usual work by March 1992. Ms. Coles testified that she did not carry through with her attempt because her condition got worse. Dr. Weinstock’s contemporaneous records do not bear this out. They indicate that Ms. Coles condition was variable from day to day, but showed no major changes, although she complained that her symptoms worsened with activity, cold weather or hot and humid weather. Neck and back mobility was consistently noted to be 80-90 percent, though Ms. Coles complained of pain at the extremes, as well as headaches and other bodily pains. Apart from planning her return to work, Ms. Coles testified that she has taken a number of vacations with her daughters, including driving to Ohio, driving to Florida "a few times," flying there "once or twice," and travelling to Jamaica for a family wedding in 1991. Taking vacations does not prove Ms. Coles can work full-time, but it further undermines her evidence that her life has been devastated by her accident injuries.

This evidence does not disprove Ms. Coles' claim of physical and psychological impairment, but that is not the test. It is for Ms. Coles to prove, on a balance of probabilities, that her accident injuries continuously prevent her from engaging in suitable work. Extrapolating from her observed functional level, I find it more probable than not that she could have returned to work, at least part-time, by December 1992, when the surveillance evidence begins. Because of the discrepancy between her observed activity and her claimed impairments, I am unable to rely on Ms. Coles evidence about her functional abilities. The insured person’s credibility is an important issue in a chronic pain case, in the absence of independent evidence of disability. In general, I found Ms. Coles to be vague, guarded and self-serving in her testimony, although I accept that she has genuine symptoms and feels aggrieved by the accident.

The surveillance evidence also undermines the expert opinions that rely on Ms. Coles statements, especially those of Dr. Weinstock, Dr. Ameis and Mr. Katz.

I have other concerns about Dr. Weinstock’s evidence. Ms. Coles testified that she started seeing him in early 1991 because she was worried about her lack of progress. She was vague about the source of the referral. I prefer Dr. Weinstock's testimony that she was referred by her lawyer. Dr. Weinstock testified that while he did not have a special relationship with the firm, they have made a number of referrals over the years. He did not feel this affects his assessment of his patients. In my view, a lawyer-generated referral to a new family doctor can be problematic because it may indicate that the insured person’s lawyers felt the doctor was likely to provide supportive documentation. In fact, I find that Dr. Weinstock's reports do not show the balanced impartial assessment that lends weight to an expert's opinion.

For example, in June 1991, Dr. Weinstock diagnosed post-traumatic headaches, relying on a report by Dr. S.G. Esmail, a neurologist, who performed a SPECT scan. However, Dr. Henry Berry, a neurologist who assessed Ms. Coles for Dominion, concluded that the hypoperfusion shown on the SPECT scan was "a non-specific finding and is of no diagnostic value in this patient." Confronted with this in cross-examination, Dr. Weinstock tacitly accepted Dr. Berry's opinion by explaining that the main value of the SPECT scan was to confirm there was nothing more serious going on. On the contrary, I find that Dr. Weinstock initially relied on the SPECT scan to bolster Ms. Coles' disability claim.

Dr. Weinstock recorded "signs and symptoms of post-traumatic fibromyalgia" in April 1991, just five months after the accident and one month after he started treating Ms. Coles. That same month, he questioned, "is this severe and permanent?" On cross-examination, when asked whether he was aware that the diagnostic guidelines for fibromyalgia require that symptoms continue for at least six months, he first responded, "6 months or 4 months; 4 months, I thought," but later explained that "fibromyalgia," "chronic pain" and "constant pain" describe the same picture. The rheumatologists, Dr. Shupak and Dr. Perlin, were not willing to give a firm endorsement of Dr. Weinstock's fibromyalgia diagnosis, although Dr. Perlin diagnosed chronic pain syndrome, manifested by signs and symptoms "compatible with the diagnosis of fibromyalgia." Accordingly to Dr. S.M. Liao, a physiatrist who assessed Ms. Coles at Dominion's request on November 16, 2000, the current consensus of the American Rheumatology Association is that there is no scientific evidence that trauma causes fibromyalgia.¹⁶ Although I am skeptical about the fibromyalgia diagnosis in this case, I do not need to accept or reject any particular diagnosis to reach a conclusion about the effect of the accident on Ms. Coles ability to work. More troubling is Dr. Weinstock’s haste in concluding that Ms. Coles symptoms were chronic, disabling and likely to be permanent.

In October 1993, Dr. Weinstock reported that it was "highly unlikely that Ms. Coles would be able to return to any type of occupation similar to her pre-accident occupation where there is a time limit or repetitive or heavy lifting motions. "He restricted her from engaging in any repetitive motions or lifting "more than a few pounds." In April 1997, Ms. Coles applied for Canada Pension Plan disability benefits, relying on Dr. Weinstock’s form report giving a diagnosis of "classical post-traumatic fibromyalgia" and stating that her prognosis was "very bad" and "discouraging." Benefits were denied on the basis that Ms. Coles did not satisfy the legislative requirement of "severe and prolonged" disability. I find Dr. Weinstock's pessimistic approach out of keeping with the minor nature of the accident, the paucity of objective signs, and Ms. Coles observed activity under surveillance. I place little weight on his opinion.

I have similar concerns about Dr. Fulgosi’s opinion. Although his reports reflect a serious and persistent psychiatric impairment, Dr. Fulgosi does not consider any alternative treatments. He also gives no consideration to the causative role of Ms. Coles' ongoing family and financial problems. I think his reports were likely influenced by the litigation context, and I do not rely on them.

I do not accept that Ms. Coles suffers from post-traumatic stress disorder. I prefer the evidence of Dr. Berry and of Dr. Sam Ozerski, a psychiatrist who assessed Ms. Coles on Dominion's behalf, that Ms. Coles' driving activity is inconsistent with a diagnosis of PTSD. Ms. Coles' contemporaneous reports indicate that her driving has been virtually unrestricted since the accident. Her ability to drive the QEW between Mississauga and Toronto during the surveillance period (December 1992-April 1994) and her admision, in her testimony, that she frequently drives to Toronto for medical checks and therapy are sufficient disproof of disabling driving anxiety after November 1993 that I need not address the discrepancy between the PTSD diagnosis and the minor nature of the accident.

The most persuasive expert evidence came from Dominion's experts: Dr. Craven, Dr. Berry and Dr. Ozersky.

Dr. Craven conducted a work capacity evaluation of Ms. Coles in September 1993. He diagnosed chronic pain syndrome, and accepted that her level of functioning would not allow her to return to her pre-accident work, based on her report of chronic headaches and soft tissue pain. However, he reported that he observed no signs of impairment during the assessment, and could find "no specific physical impairment . . . which precludes a return to employment." He felt that Ms. Coles was capable of sedentary work.

Ms. Coles' solicitors asked Dr. Perlin to comment on this. She was concerned that Dr. Craven did not assess Ms. Coles' ability to perform repetitive tasks or her tolerance for prolonged sitting, noting that "chronic unremitting pain is the limiting factor." Based on the surveillance evidence, I do not accept that Ms. Coles suffers "chronic unremitting pain." In any event, the surveillance led Dr. Craven to reconsider his assessment. His follow-up report of September 12, 1994 reflects a new skepticism about Ms. Coles' reported symptoms, based on the surveillance videotape. Dr. Craven testified that he observed no hesitation, adaptation or other pain behaviour in Ms. Coles' movements. He noted,

In this videotape, the female subject's movement and activities do not suggest the presence of any physical impairment or limitation of activity. It is likely that the subject of the videotape is capable of lifting and carrying heavier loads than the maximum weights lifted and carried by Ms. Coles during the Work Capacity Evalutaion. There is no direct way to measure the intensity of headaches or soft tissue pain. I would not, however, expect a person with a severe headache or pain to move as normally or with as much vigour as the subject in this videotape.

I find that Dr. Craven approached the case with an open mind, and accordingly I place some weight on his changed opinion.

Dr. Berry saw Ms. Coles on August 17, 1994. He does not accept that Ms. Coles is disabled as a result of the accident. On physical examination, he found that she had "essentially full range of neck and back movement, with mild limitation of right shoulder internal rotation and with widespread tenderness over the neck, shoulders, back, upper and lower extremities. "Neurological examination was normal. It is Dr. Berry’s opinion that Ms. Coles symptoms resulting from the accident would have diminished after several weeks, and that any ongoing symptoms and disability since that time are related to her family and financial problems and the accident litigation.

Dr. Ozerski assessed Ms. Coles on October 25, 2000. Psychiatrically, he diagnosed a major depressive episode, in remission since she started taking Zoloft, and a likely seasonal affective disorder. The latter diagnosis was based on Ms. Coles report that she is able to work for 4-5 hours, using pacing, for the warm half of the year, but has not been able to work in the winter since the late '90s.

As stated above, I accept Dr. Ozerski’s opinion that Ms. Coles does not have post-traumatic stress disorder, based on her candid statement that she loves to drive. Dr. Ozerski feels that Ms. Coles is "very high[ly] achievement oriented and probably perfectionistic." I accept this assessment, which was shared by Robert Katz, who felt Ms. Coles' perfectionism was a barrier to her return to work.

In Dr. Ozerski’s opinion, Ms. Coles functions in the normal to low normal range. His conclusion was as follows:

This woman at present does not have a psychiatric disorder, provided she remains on Zoloft. There are no real psychiatric impairments other than a sleep disturbance, which may be the result of restless leg and should be investigated. There are no impairments in emotional control or communication. There are only very mild impairments in terms of energy. There are no impairments in the area of cognition. Therefore, . . . she is not disabled from any occupation that she is suitable to by virtue of her training and experience. This is strictly from a psychiatric perspective. I cannot comment on the physical aspects of her job. Clearly when her pain is better in the summertime, she can work and she denies being depressed. Therefore, to her, the primary limitation is that of pain in her hands and body, making it hard for her to work, not psychiatric symptoms.

I am prepared to accept that Ms. Coles suffers a residual depression, possibly with a seasonal component, despite treatment with anti-depressants. However, I do not accept that it continuously prevents her from working as a dressmaker.

A number of Commission decisions have considered the phrase, "continuously prevents." I accept that "a significant interruption or abatement of the insured person’s disability" relieves the insurer of the obligation to pay benefits after 156 weeks,¹⁷ although "the test should be informed by reason, common sense and a healthy regard for the realities of the situation."¹⁸ Accordingly, "entitlement is not lost simply because the insured person is capable of working for a brief period"¹⁹ or because disability is episodic.²⁰ I also accept that an insured person’s return to work creates a rebuttable presumption against entitlement, although this is a question of fact to be proven in every case.²¹ I agree with Director's Delegate Draper that the presumption can be rebutted by proof that the work is not suitable or that the insured person's performance "may be so compromised that it cannot be said that he or she is capable of doing the work in any meaningful sense." However, it is not enough for the insured person to show that pain makes the job more difficult, or makes her "somewhat less productive. . . . The question is whether the applicant is substantially able to do the alternative job, considered as a whole, including reasonable hours and productivity."²² In many cases, the best evidence of disability is an insured person's detailed, corroborated, evidence about her attempts to return to work, and why they failed.

Ms. Coles claims that she has difficulty getting going in the morning, cannot sit for prolonged periods, and has not enough stamina to remain productive on a full-time basis. I accept that these are challenges for her, but I am not persuaded they "continuously prevent" her from engaging in full-time work as a dressmaker. Ms. Coles income tax returns indicate that she has earned some employment income in every year since her benefits were terminated. While she has not worked full-time at any time since the accident, and her post-accident income has never been remotely comparable to her pre-accident income, her ability to work for two sustained periods in 1997-1998 and 2000-2001 calls for an explanation. I would like to have heard from a teacher, a client or an employer who could provide independent evidence of Ms. Coles' performance problems and her efforts to overcome them.

Ms. Coles submits that her failure to return to work results partly from Dominion’s failure to offer her rehabilitation assistance. I find that neither party has paid much attention to rehabilitation in this case, as the parties were in an adversarial relationship well before benefits were terminated in late 1993. I find it significant that Ms. Coles has not participated in any structured rehabilitation program since Dr. Weinstock removed her from Dominion’s rehabilitation program in October 1993. Nor has she requested vocational rehabilitation assistance since then. An insured person who adopts this approach takes a risk that an arbitrator will conclude that she has voluntarily withdrawn from the workforce for reasons unrelated to the accident. That is the position in which I find myself. Ms. Coles has the onus of proof. I am not satisfied she has met that onus.

Given this finding, I need not address Dominion’s submission that Ms. Coles failure to return to work since the accident relates to serious family and financial difficulties that have beset her before and after the accident.

Amount of Benefits Payable

Dominion paid weekly income benefits totalling $41,342.79. Ms. Coles submits that the benefits she received from her other insurance policies are not deductible under s.12(4)(b), and that her benefits paid to November 1993 should be topped up accordingly. Dominion submits that Ms. Coles was only entitled to benefits totalling $33,379.34 in the 156 weeks following the accident. It seeks repayment of the overpaid amount.

In the early part of the hearing, Dominion challenged Ms. Coles evidence about her pre-accident income and expenses. Ms. Coles objected that Arbitrator Palmer decided this issue in her supplementary decision of September 13, 1995.

In that decision, Arbitrator Palmer ordered Dominion to pay additional benefits of $27,460.78 that she found were owing to February 13, 1995, the date of her first decision. The amount ordered depended on Arbitrator Palmer’s finding that Ms. Coles continued to be entitled to benefits under the pre-156 week entitlement test set out in s.12(1). When that finding was rescinded on appeal in July 1997, Director’s Delegate Naylor also rescinded Arbitrator Palmer’s payment order, expressly remitting the quantum question for rehearing along with the issue of entitlement under s.12(5)(b).²³

In the meantime, Ms. Coles commenced a second arbitration for post-156 week benefits under s.12(5)(b) in April 1997. Although the Report of Mediator, Application for Arbitration and Response to the Application for Arbitration do not refer to any dispute about the amount of weekly benefits, that issue, along with Dominion’s request for repayment, is clearly set out in the pre-hearing letter of August 12, 1999.

I find I have jurisdiction to determine the amount of any benefits owing to Ms. Coles and the amount of any repayment order owing to Dominion. Ultimately, Dominion withdrew its challenge with respect to Ms. Coles pre-accident income and expenses. This leaves the question of the deductibility of her other insurance benefits.

The parties agree on the main financial facts, as they had before Arbitrator Palmer. They agree on the amount Ms. Coles received from Dominion, and the amounts she received from her other insurance policies and when she received the money. Their main dispute is about whether Ms. Coles other insurance benefits are deductible under s. 12(4)(b), which provides that gross weekly income, for the purpose of calculating the benefit rate, is reduced by "any payments for loss of income, except Unemployment Insurance Benefits, received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan."

It appears not to have been disputed before Arbitrator Palmer that Ms. Coles other benefits were "payments for loss of income . . . under [an] income continuation benefit plan." At that time, it was widely accepted that benefits received under private disability policies were deductible under s.12(4)(b), based on the decision of Caswell J. in Cugliari v. White.²⁴ Although the issue in Cugliari was whether Canada Pension Plan disability benefits were deductible from tort damages under s.267(1)(c) of the Insurance Act, the decision was applied to s.12(4)(b) because of the almost identical wording of the two provisions.

The law has since changed. The decision of the trial judge was overturned by the Divisional Court, and that decision was upheld by the Court of Appeal and the Supreme Court of Canada.²⁵ Again, the courts and Commission adjudicators applied the result in accident benefits cases under the SABS-1990²⁶ and SABS-1994.²⁷

The leading Commission case is Wilcox and Economical, in which Director's Delegate Draper confirmed the arbitrator’s finding that the insured person’s disability benefits under a private disability policy were not "payments for loss of income under [an] income continuation plan" under s.75(1) of the SABS-1994.²⁸ The Delegate agreed that Cugliari applies, but that alone did not determine the outcome, because Wilcox involved benefits under a private disability policy with Great-West Life, not CPP disability benefits. In concluding that the insured person's GWL benefits were not deductible, the Delegate noted that while the policy required her to be employed, it did not require proof of loss of income, and her benefits were not tied to her income. Rather, they were tied to the level of coverage she had purchased. The policy provided a fixed benefit for a fixed premium. In the Delegate’s view, the payments were "more accurately described as payments upon the happening of an event, namely disability, than payments for loss of income or income continuation."²⁹ It was also important to the decision that the insured person was a real estate agent who had bought the policy on her own, without any contribution or involvement of her employer. Delegate Draper noted that encouraging such foresight "has been viewed by the courts as a public good, leading to interpretations that have given such individuals full access to their benefits unless the legislation clearly provides otherwise." He was "not persuaded that s.75(1) clearly captures the benefits Ms. Wilcox receives from GWL."³⁰

I accept that Wilcox and Economical applies. I find that Ms. Coles' policies with Citadel and DAA are similar, in all relevant respects, to the GWL policy that was at issue in that case. Ms. Coles purchased the Citadel disability policy in May 1989, agreeing to pay a premium of $1,132.80 per year. It was not cancellable until age 65 and could be renewable thereafter. The policy paid a fixed monthly benefit of $4,000 for a maximum of two years, commencing on the 31^st day. Ms. Coles also purchased three DAA policies that covered injuries from specified accidents. The three policies paid a total of $200 weekly for two years. Although I heard limited evidence and submissions on the point, it appears Ms. Coles was not required to provide financial information or proof of loss of income with respect to any of these policies. None of the policies contains an integration clause. I find Delegate Draper's comment in Wilcox and Economical applicable: "these payments are more accurately described as payments upon the happening of an event, namely disability, than payments for loss of income or income continuation." Ms. Coles arranged for and paid for these policies herself, in order to protect her future as a self-employed person. Allowing her to reap the benefits of her prudence is not "double recovery." I find that the Citadel and DAA benefits are not "payments for loss of income under . . .[an] income continuation plan."

Although the Supreme Court of Canada denied leave to appeal the Court of Appeal decision in Cugliari in December 1998, Ms. Coles did not raise the issue until the end of the arbitration hearing. Dominion submits that she waited too long. I agree that Ms. Coles should have given earlier notice that she intended to raise this issue. However, I find her delay understandable given the way this case developed. Between Arbitrator Palmer's first decision of February 1995 and the decision of the Divisional Court in May 1999, both parties focussed on the interpretation of "for any period in excess of 156 weeks." In preparing for the second arbitration hearing, their focus was on the question of Ms. Coles' entitlement to weekly income benefits under s.12(5)(b). There were also a number of preliminary issues, including contentious disputes about pre-hearing disclosure of surveillance and investigation materials and documents from the Insurer's files. The lapse of time since the accident complicated all these questions. In this context, it is not surprising that both parties positions on the quantum questions continued to evolve throughout the hearing.

Director's Delegate Naylor dealt with a similar problem in Field and State Farm Mutual Automobile Insurance Company. In that case, the insurer conceded that as a result of Cugliari, the insured person’s CPP disability benefits were not deductible, but submitted that the arbitration was time-barred pursuant to s.281(5) of the Insurance Act. That section states that the two year limitation period begins with "the insurer’s refusal to pay the benefit claimed . . ."

Director’s Delegate Naylor confirmed the arbitrator’s finding that an insurer’s routine adjustment of the benefit rate was not a "refusal." She summarized the problem in the following passage:³¹

This appeal involves continuing benefits. It is not a case in which the insurer has stopped paying benefits. It does not involve a long-closed claim. State Farm's position is that Mrs. Field has two years from the date the deductions started to dispute them. If she does not commence proceedings within the time allowed, she cannot recover any past deductions otherwise owing and, by implication, her remedy with respect to deductions from future benefits also may be barred. This is notwithstanding clear law that such deductions are unauthorised. In contrast, insurers are allowed considerable flexibility in making adjustments for collateral benefits. The Schedule allows insurers to adjust benefits retroactively, requiring repayment of weekly income benefits to the extent of deductible payments received, without specific time constraints. Moreover, as is evident from the Commission cases, regardless of whether there is a right to repayment, insurers recalculate ongoing benefits in light of new information, including case-law in their favour.

Delegate Naylor concluded that a straightforward, fair and reasonable interpretation of the limitations provision must allow the insured person to have her benefit rate adjusted retroactively in accordance with legal developments. I agree with this approach.

Dominion adjusted Ms. Coles benefit rate, starting in 1991, on the basis that her other insurance benefits were deductible. This was reasonable, considering the state of the law at that time. Applying the same standard, Dominion should have made a retroactive adjustment to Ms. Coles benefits when the Supreme Court of Canada denied leave in December 1998, a decision which was well known to the industry. At that time, Ms. Coles case remained open, and Dominion continued to dispute the amount of benefits she received. I can think of no good reason for denying Ms. Coles the benefit of the retroactive adjustment. However, I am not persuaded that Dominion acted unreasonably in failing to make the adjustment in the absence of a request from Ms. Coles. Accordingly, I am not persuaded that Dominion’s conduct – either in making the deductions or failing to make retroactive adjustments – attracts a special award under s.282(10) of the Insurance Act.

Given this finding, I need not address Dominion’s submissions about the calculation of Ms. Coles' gross weekly income, because she is entitled to a benefit of $600 per week even if I accept Dominion's submissions. Therefore, Ms. Coles is entitled to $600 per week for 156 weeks, for a total of $93,600, less the $41,342.79 already paid.

Dominion submits that it should not be required to pay interest under s.24(4) of the SABS-1990 because of the long delays that resulted from the appeal and judicial review of Arbitrator Palmer’s initial decision. The issue in the appeal and judicial review was interpretation of the phrase, "for any period in excess of 156 weeks" in s.12(5)(b). Dominion submits that the question of law was raised by the arbitrator herself. However, my order for payment of additional benefits relates only to the "collateral benefits" issue, which was not an issue in the first arbitration, the appeal or the judicial review, and only became one in the second arbitration proceeding.

Subsection 24(4) mandates the payment of interest from the date benefits become overdue – 30 days after a completed application. Despite the high rate of interest (2 percent per month), the purpose of this provision is to compensate the insured person for lost use of her money. Unlike the interest provision in s. 282(10) of the Insurance Act, s.24(4) is not punitive, though it does reflect the legislature's recognition that insured persons rely on the flow of benefits. On the other hand, the benefits are not payable until an application is completed, and, by implication, the insurer has sufficient information to allow it to calculate the amount of benefit owing. Ms. Coles did not request the adjustment to her benefits until September 14, 2001, during closing argument. At that point, Dominion had all the information it needed in order to correct Ms. Coles benefit rate. I find that Ms. Coles is entitled to interest on the benefits owing starting 30 days thereafter – for ease of calculation, October 15, 2001.

EXPENSES:

If the parties are unable to agree about arbitration expenses, an expenses hearing may be requested pursuant to Rule 77 of the Code.

June 12, 2002

Nancy Makepeace Arbitrator

Date

APPENDIX: Pre-Hearing Disclosure of Surveillance Evidence

At the outset of the hearing on January 29, 2001, Ms. Coles objected that Dominion was late in serving its materials, including investigation reports and a surveillance videotape on which it intended to rely. I ruled that Dominion had not complied with the substantive disclosure requirements set out in Rule 37 of the Code. Rule 37 requires a party who "intends to rely on any portion of surveillance or investigative evidence" to disclose information about the investigators and the investigation, and to produce "copies of all videotapes, photographs, reports, notes and summaries taken or prepared by anyone upon whose evidence the party intends to rely at the hearing." The rule is intended to ensure that surveillance and investigation evidence provides an accurate, fair and complete representation of the insured person's observed activities. Early disclosure of surveillance and investigation information is intended to promote settlement and prevent "trial by ambush."

On January 19, 2001, Dominion produced an investigation report, dated December 3, 1992, and a videotape prepared in relation to that report, both of which it intended to rely on. It did not produce the investigator’s notes pertaining to that evidence. Dominion also intended to rely on a number of reports prepared by the same investigation firm – King-Reed – for Co-operators Insurance Company, the third party insurer.³² Dominion did not produce the investigator's notes, original black and white stills, or videotapes prepared in the course of that investigation because Co-operators and King-Reed refused to release them. Mr. Manuel Acacio, the King-Reed investigator involved in the file, testified that the insurers agreed to share the cost of the December 3, 1992 report, but the cost-sharing agreement ended there, and the subsequent investigation was conducted entirely for Co-operators. He also confirmed there were two more reports prepared for Co-operators that had not been produced to either party in this proceeding.

I ruled that since Dominion proposed to rely on investigation and surveillance evidence prepared by King-Reed for both insurers, all the reports, notes, videotapes and still photographs must be produced. The material was ultimately produced in March 2001, and the hearing resumed on April 9, 2001.

Another part of my ruling on January 29, 2001 dealt with Ms. Coles' request for the Insurer's claims file. Mr. Mitchell agreed to produce any statements made by Ms. Coles, third-party form reports filed on her behalf, benefit payment summaries and certain other documents. He also prepared a list of documents Dominion objected to producing, along with the reasons for objecting. In early April, Dominion produced relevant documents pre-dating the application for mediation. Although the parties continued to raise production issues throughout the hearing, I declined to order further production on July 30, 2001.

One issue remained. When Mr. Mitchell received his client’s file on March 15, 2001, he found that it contained further and more recent surveillance material prepared by Profile, another private investigation company. I refused to admit it when the hearing resumed on April 9, 2001, because Dominion had not yet made full timely disclosure in according with Rule 37. This was not done until mid-July 2001. When the hearing resumed on July 30, 2001, I refused to admit the Profile materials. By that time, Ms. Coles had finished testifying, as had Dr. Weinstock and Dr. Ameis. Ms. Coles was likely to be severely prejudiced by the late disclosure of these materials, unless she were allowed to resume her testimony and recall Drs. Weinstock and Ameis. On day seven of the hearing, almost eleven years after the accident and almost seven years after Ms. Coles first application for arbitration, I found that any further delay would offend the Commission’s mandate to bring about the quickest, most just and least expensive resolution of the dispute.

Neutral Citation: 2002 ONFSCDRS 94

FSCO A97-000647

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

PINA COLES

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

7. The Insurer shall pay the principal sum of $52,257.21, being the difference between the amount of benefits to which Ms. Coles was entitled under s.12(1) of the SABS-1990, and the amount paid.

8. The Insurer shall pay interest on the principal amount set out in paragraph 1, commencing October 15, 2001, under s.24(4) of the SABS-1990.

9. If the parties are unable to agree on arbitration expenses, the Commission may be contacted in accordance with Rule 77 of the Dispute Resolution Practice Code - Third Edition (April 15, 1997).

10. Ms. Coles application is dismissed with respect to weekly income benefits under s.12(5)(b) and a special award under s.282(10) of the Insurance Act.

11. Dominion's request for repayment of benefits, under s. 27 of the SABS-1990, is dismissed.

June 12, 2002

Nancy Makepeace Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2On July 1, 1998, the Ontario Insurance Commission was amalgamated with the Pension Commission of Ontario and the Deposit Institutions Division of the Ministry of Finance, to create the Financial Services Commission of Ontario.
3. 3The Fourth Edition of the Code came into effect on May 31, 2001, but the Third Edition continues to apply to arbitration proceedings where the pre-hearing pre-dated the new Code.
4. 4Mavis Haws, Accident Benefits Unit Manager at Dominion, notified Ms. Coles and the Commission, on May 25, 2000, that Dominion would cease acting as servicing carrier for Facility Association claims effective May 26, 2000, and that the file would be transferred to Cunningham Lindsay, Canada, independent adjusters. On the first day of this hearing, she testified that Dominion transferred its entire original file to Cunningham Lindsay, which acts as Dominion's successor in this matter. Mr. Mitchell represents Cunningham Lindsay. There was some discussion about the appropriate style of cause. In my letter of February 20, 2001, I advised the parties that Dominion's name would remain on the style of cause absent submissions to the contrary. As no submissions were received, I refer to "Dominion" throughout.
5. 5(OIC A-007416, February 13, 1995).
6. 6(OIC A-007416, September 13, 1995).
7. 7(OIC Appeal P-007416, July 28, 1997).
8. 8Unreported decision of Divisional Court (Keenan, Cumming and Swinton JJ.), dated May 18, 1999, Court File No. 594/97.
9. 9The most significant of these issues related to disclosure of surveillance evidence. My orders are confirmed in my letter of February 20, 2001 and summarized in an Appendix to this decision.
10. 10The requirements for "post-156 week benefits" have been considered in a number of decisions. I adopt Arbitrator Manji's review of the principles governing "suitable employment" in Caruso and Guarantee Company of North America (OIC A-006856, May 9, 1996), which has been widely followed.
11. 11Exhibit 2, Tab 17A, p. 24.
12. 12I adopt the principles set out in Spicer and State Farm Mutual Automobile Insurance Company (OIC A-010158, May 24, 1995), Wigle and Royal Insurance Company of Canada, (OIC A-012312, January 12, 1996), Gagnon and Jevco Insurance Company, (OIC A-015357, May 1, 1996), Caruso and Guarantee Company of North America (OIC A-006856, May 9, 1996), and Murray and Wawanesa Mutual Insurance Company (OIC A-003224, August 23, 1996).
13. 13Ms. Coles also complained of decreased hearing, a complaint she had also made to Dr. Shupak, along with visual problems. Neither doctor attributed these symptoms to the accident, and Ms. Coles did not pursue that claim in this proceeding.
14. 14The well established principles are reviewed in Quattrocchi and State Farm Mutual Automobile Insurance Company (OIC A-006854, September 29, 1997).
15. 15The investigator also filmed Ms. Coles in the evening through the lighted windows of her apartment. The videotape was taken from the parking lot of her condominium building. I disregarded these observations because I find they infringed her reasonable expectation of privacy in her home. See, for example, Puopolo and Wellington General Insurance Company of Canada (OIC P-006445, July 25, 1996); Levey and Traders General Insurance Company, (OIC A96-001590, June 30, 1992), confirmed on appeal without discussion of this point, (FSCO P92-00035, February 25, 1999); and Carr and Lombard General Insurance Company of Canada, (OIC A00-000441, September 11, 2001).
16. 16In chief, Dr. Liao testified that the diagnosis of post-traumatic fibromyalgia "has been completely deleted from the medical terminology." She modified this opinion, reluctantly, on cross-examination. I was troubled by Dr. Liao's approach to the JAMAR grip test and her dismissal of Ms. Coles' complaints about sleep problems. I disregarded her evidence specifically concerning Ms. Coles because I find she did not approach the assessment with an open mind.
17. 17Riley and Pilot Insurance Company (FSCO P99-00009V, February 29, 2000), at p. 9.
18. 18Lanctot and Zurich Insurance Company (OIC P99-00012, November 9, 1999), at p. 11.
19. 19Ibid.
20. 20Ibid, at p. 11, referring to A.K. and Allstate Insurance Company of Canada (FSCO P92-00057, June 22, 1999).
21. 21Chudy and West Wawanosh Mutual Insurance Company (OIC A96-000924, January 23, 1997), approved in Lanctot and Zurich, at p. 12.
22. 22Spicer and State Farm Mutual Automobile Insurance Company (OIC A-010158, May 24, 1995).
23. 23Paragraph 3 of the appeal order states, "Paragraph 1 of the arbitrator's order dated September 13, 1995 is rescinded. The amount of benefits payable to Ms. Coles and the amount of repayment owed to Dominion of Canada General Insurance Company, if any, are remitted to the arbitrator for determination."
24. 24(1994), 1994 CanLII 7343 (ON CTGD), 21 O.R. (3d) 225 (Gen.Div.)
25. 25(1996), 1996 CanLII 11778 (ON CTGD), 31 O.R. (3d) 42 (Div.Ct.), (1998), 1998 CanLII 5505 (ON CA), 38 O.R. (3d) 641 (Court of Appeal), leave to appeal to Supreme Court of Canada denied, December 10, 1998 (Court File No. 26722).
26. 26Goos and Non-Marine Underwriters, Members of Lloyd's (OIC A96-000393, June 12, 1997). This decision relied on the decision of the Divisional Court in Cugliari. It was confirmed on appeal on other grounds (FSCO P96-00038, September 25, 1998). Also, Gignac v. Canadian General Insurance Company, unreported decision of Brockenshire J., dated December 31, 1997 (Court File 95-GD-32715), and Gawronski v. Allstate Insurance Company, unreported decision of Juriansz J., dated June 3, 1998 (Court File 97-CV-128730).
27. 27LaForme and Economical Mutual Insurance Company (FSCO A97-000679, June 11, 1998), Deslippe and Motor Vehicle Accident Claims Fund (FSCO A97-001878, October 20, 1999), Wilcox and Economical Mutual Insurance Company (FSCO A98-000058, January 26, 1999), confirmed on appeal (FSCO P99-00015, March 2, 2000). The deductibility rules set out in the SABS-1994 are more complex than the SABS-1990 rule, but the same key words are at issue - "payments for loss of income . . . under the laws of any jurisdiction or under any income continuation plan. "
28. 28Ibid. The decision includes a review of the evolution of the law in this area.
29. 29At p.24.
30. 30At pp. 24-25.
31. 31(FSCO P98-00046, January 17, 2000). See also Nelson v. General Accident Group (Canada) Ltd., [1990] O.J. No. 3060 (Gen.Div.).
32. 32Dated December 20, 1992, March 18, 1993, January 17, 1994 and June 17, 1994.