Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2003 ONFSCDRS 148

Appeal P02-00024

Appellant/Respondent

and

Respondent/Appellant

Before:

David R. Draper

Representatives:

David Morin for Mr. Welsh

Gordon L. Robson for Economical

Hearing Date:

September 18, 2003

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

Mr. Welsh's appeal is allowed in part. Paragraph 3 of the arbitration order, dated August 16, 2002, is revoked and replaced with the following:
Effective May 5, 2003, Mr. Welsh's income replacement benefits shall be calculated by adding 80 per cent of the total amount of any allowable business losses, even if this calculation results in a weekly amount in excess of $400.
Economical's appeal is dismissed.
If the parties cannot agree on appeal expenses, they may request a determination of that issue by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.

October 7, 2003

David R. Draper Director of Arbitrations

Date

Both parties appeal from the arbitration order dated August 16, 2002. Mr. Welsh submits that the Arbitrator erred in rejecting his claim for housing expenses on the basis that he had already settled the issue. He also challenges the Arbitrator's conclusion that his income replacement benefits ("IRBs") are limited to $400 per week, even if his post-accident business losses exceed this amount. Economical Mutual Insurance Company ("Economical") objects to the Arbitrator's order that Mr. Welsh is entitled to rehabilitation benefits for a new boat and snowmobile at a cost of approximately $75,000, less the trade-in value of his existing vehicles. It claims there was insufficient evidence to support the conclusion that these are reasonable and necessary rehabilitation expenses.

Mr. Welsh's situation is unusual. He lives on an island in Lake Muskoka with no road access. He runs a contracting business from this property, doing cottage renovations and building docks and boathouses. As a result, he relies on a boat in the summer and a snowmobile in the winter for both personal and business transportation.

On February 8, 1998, Mr. Welsh was injured in a snowmobile accident. He hit a pressure crack in the ice and his snowmobile flipped, landing on him. He underwent back surgery, which left him bedridden for quite some time. In addition to his ongoing physical problems, Mr. Welsh suffers from a bipolar mood disorder that has made it difficult for him to deal with his limitations.

After the accident, Mr. Welsh continued to operate his business, although his role changed. According to the Arbitrator, he was able to perform some managerial duties, including site visits, but could not work as a carpenter:

A typical day for Mr. Welsh involves attending to his personal care, making breakfast, cleaning dishes, ordering materials for a job site, visiting the site, getting wood from town and bringing it back to the marina. Mr. Welsh does some stretches, goes for a walk at mid-day but finds that by afternoon, he must get off his feet because he starts to tighten up. As a result, he can only devote a couple of hours to business in a typical day.

Mr. Welsh's business is no longer doing well and he is barely breaking even. Paying for replacement labour is eating up his funds and causing him financial difficulty. As well, he is having problems sleeping and claims to have one-half the strength he had formerly.¹

Economical accepted Mr. Welsh's claim and paid various benefits, including IRBs. The parties could not agree, however, on three issues that went before the Arbitrator in March 2002: the cost of housing on the mainland for periods when Mr. Welsh could not travel to and from his island home (the "ice in" and "ice out" periods); the cost of a new boat and snowmobile ($76,556); and the calculation of IRBs. Success was mixed, and both parties appealed.

A. Housing Expenses

The Arbitrator rejected Mr. Welsh's claim for housing expenses. She concluded that he was simply re-framing issues that had been settled earlier. On appeal, Mr. Welsh claims the Arbitrator erred in failing to respect the clear and unequivocal wording of the release signed on August 2, 2000, which states, in part, as follows:

IN CONSIDERATION of all sums paid to date by the Insurer to the Applicant and the further sum of TWENTY THOUSAND DOLLARS ($20,000), all inclusive of claims, interest and costs, paid by the Insurer to the Applicant, the said Applicant does hereby release and forever discharge the Insurer, its successors and assigns from any and all demands, claims, actions, cause of actions, litigation, mediations, and arbitrations regarding the issues in dispute filed with the Financial Services Commission of Ontario, being file No. A99-000547-LD for Statutory Accident Benefits including past, present and future claims under section 15(5)(h)(i) and (l) of the Statutory Accident Benefits Schedule as described in the attached Written Notice and as provided under the said policy arising out of the accident described above as these particular sections and subsections relate to home and business relocation, without limiting the Applicant's right to claim other benefits under these headings.²

Mr. Welsh contends that he accepted an amount of money ($20,000) that was based solely on the parties' assessment of the potential benefits and risks of proceeding to arbitration. In exchange, he gave up his right to claim the cost of relocating his residence and business to the mainland. In his submission, the release is specific and narrowly drafted — it only deals with "home and business relocation" and makes it clear that he retained the right to make additional claims under clauses 15(5)(h), (i) and (l). Put differently, he gave up his right to ask Economical to fund his move to the mainland, but did not give up his right to remain on the island and seek funding for accommodation on the mainland during the "ice in" and "ice out" periods.

At the appeal hearing, although not in his written submissions, Mr. Welsh argued that the Arbitrator should have read the release without reference to any extrinsic evidence. I reject this argument for two reasons. First, there is no suggestion that Mr. Welsh objected to the evidence considered by the Arbitrator. On the contrary, it was filed as part of a joint document brief. Second, the release cannot be interpreted without inquiring into the scope of the issues in dispute in the earlier arbitration file — A99-000547-LD. In my view, that is what the Arbitrator did.

Mr. Welsh's real argument is that the Arbitrator erred in her assessment of the scope of the earlier arbitration hearing. This is illustrated by paragraph 18 of his written appeal submissions: "Based on the information provided, Arbitrator Killoran should have found that only home and business relocation had been settled, and that other housing and business expenses could still be claimed by Mr. Welsh." This is a difficult argument in an appeal limited to questions of law.³In any event, I find no error in the Arbitrator's approach and ample evidence to support her conclusion.

According to the original Report of Mediator, dated March 8, 1999, Mr. Welsh claimed that his injuries made it dangerous for him to live on the island. He asked Economical to pay the balance of the money he needed to buy a house on the mainland after selling his house on the island. When mediation failed, he applied for arbitration, describing the issue in dispute by attaching the Report of Mediator.⁴

Before the dispute was settled, Mr. Welsh submitted claims for the cost of rental accommodation on the mainland. He points to this as evidence that Economical knew there was a distinction between his claim for the cost of relocating to the mainland and the cost of alternative accommodation on the mainland during the "ice in" and "ice out" periods. The record suggests, however, that Economical consistently took the position that any claim for accommodation on the mainland was part of the ongoing dispute. For example, in response to Mr. Welsh's claim for accommodation costs for December 6, 1999 to January 3, 2000, Economical stated: "The issue of housing is an issue currently in dispute and the subject of an arbitration hearing."⁵

After receiving this response from Economical, Mr. Welsh's lawyer presented an offer to settle the claim for $48,000, explaining that approximately $45,000 would go "toward Mr. Welsh's relocation needs" and the remainder to pay his legal fees and disbursements.⁶ In my view, this undermines Mr. Welsh's argument that the amount of the settlement was based solely on a risk assessment, unrelated to his actual costs.

After further negotiations, Economical offered to settle the issue for $20,000. Mr. Welsh made a counter offer of $25,000 and, one day later, agreed to settle for $20,000.⁷ Counsel for Economical then wrote, presenting the following alternatives:

To resolve all matters presently in arbitration for $20,000 inclusive of all claims, interest and costs;
As an alternative to paragraph 1, to resolve all matters presently in arbitration for the sum of $3,500 per year for the next eight years payable annually on proof that your client [Mr. Welsh] has incurred expenses of at least this amount during freeze up and break up;
Further, in the alternative, the sum of $48,000, all inclusive, in exchange for a Full and Final Release for all benefits except Income Replacement Benefits;
Finally, in the alternative, the sum of $85,000, all inclusive, in exchange for a Full and Final Release of all benefits.⁸

After some negotiation over the wording of the release, the dispute was settled for $20,000, using the wording set out earlier in the decision.

Even if the Arbitrator might have reached a different conclusion, the evidence supports her finding that the arbitration proceeding was not as narrowly constrained as Mr. Welsh suggests. The parties considered his need to relocate to the mainland, either full-time or just during the "ice in" and "ice out" periods, and settled the issue for $20,000.

Finally, Mr. Welsh submits that the Arbitrator erred in failing to apply the contra proferentem rule in interpreting the release. In the absence of any indication that this rule was argued, I am not prepared to find that she erred in failing to mention it. This is particularly true given the evidence that Mr. Welsh's lawyer took an active role in re-drafting the section of the release under consideration.⁹

B. Income Replacement Benefits

This issue, dealing with the calculation of Mr. Welsh's IRBs, turns on a close reading of sections 6 and 7 of the SABS-1996. The most relevant portions are set out below:

Amount of Benefit

(1) The amount of the income replacement benefit shall be,

(a) for each of the first 104 weeks of disability, 80 per cent of the insured person's net weekly income from employment determined in accordance with section 61; and

(b) for each week after the first 104 weeks of disability, the greater of the amount specified in clause (a) and $185.

(2) The insurer may deduct from the amount of the income replacement benefit payable to an insured person 80 per cent of the net income received by the insured person in respect of any employment subsequent to the accident.

[subsections (3) and (4) deal with the calculation of net post-accident income from employment and self-employment]

(5) If the insured person was self-employed at the time of the accident and the person incurs losses from self-employment as a result of the accident, the insurer shall add to the amount of the income replacement benefit payable to the person 80 per cent of the losses from self-employment incurred as a result of the accident.

[subsection (6) deal with the calculation of losses from self-employment]

Collateral Payments for Loss of Income and Maximum Amount of Benefit

(1) Despite subsection 6 (1) but subject to subsections 6 (2) to (6), the weekly amount of an income replacement benefit payable to a person shall be the lesser of the following amounts:
The amount determined under subsection 6 (1), reduced by,

i. net weekly payments for loss of income that are being received by the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan, and

ii. net weekly payments for loss of income that are not being received by the person but are available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan, unless the person has applied to receive the payments for loss of income.

The greater of the following amounts:

i. $400.

ii. If the optional income replacement benefit referred to in section 27 has been purchased and is applicable to the person, the amount fixed by the optional benefit.

The Arbitrator accepted Economical's position that post-accident business losses cannot increase IRBs beyond the $400 maximum in s. 7(1) of the SABS-1996.¹⁰ Her reasons on this point are brief:

It is not within the ambit of the statutory accident benefits scheme to interpret subsection 6(5) as allowing the addition of losses from self-employment beyond the $400 maximum. Such an exercise would result in the possibility of an IRB for self-employed applicants which could be limitless when not subject to the $400 maximum. On the contrary, it appears that the statutory scheme has offered the option of purchasing optional income replacement benefits to raise the maximum income replacement benefit to $600, $800 or $1000. This option is the only means by which the amount of the income replacement benefit can exceed the $400 maximum. (p. 17)

Mr. Welsh claims the Arbitrator erred in ignoring the plain and ordinary meaning of the legislation. In his submission, s. 6(5) clearly states that business losses are added to the IRBs payable, and the maximum in s. 7(1) is "subject to" s. 6(5). Further, he argues that his approach responds to the particular vulnerability of self-employed persons.

Various aspects of the legislation are not contentious: IRBs are calculated based on 80 per cent of the insured person's net weekly income prior to the accident [s. 6(1)]; an insured person who is entitled to IRBs must make reasonable efforts to return to work [s. 56]; if the insured person earns any post-accident income, his or her IRBs are reduced by 80% of the net amount [s. 6(2) – (4)]; if the insured person suffers any post-accident business losses as a result of the accident, his or her IRBs are increased by 80 per cent of this amount [ss. 6(5) - (6)]; IRBs are reduced by collateral benefits received by or available to the insured person [s. 7(1)1]; and the calculation of IRBs is subject to a maximum of $400 (or a greater amount if optional benefits have been purchased) [s. 7(1)2].

The problem is that the result can differ depending on the sequence in which the calculation is done. More specifically, the question is whether the maximum in s. 7(1)2 is applied before or after post-accident business losses are taken into account.

The parties present two different interpretations. Mr. Welsh submits that according to the plain meaning of s. 7, it applies "[d]espite subsection 6(1) but subject to subsections 6(2) to (6)." In other words, s. 7, including the maximum, is applied before post-accident losses are taken into account. Although this appeal only deals with business losses, Economical points out — correctly in my view — that Mr. Welsh's approach would also affect the treatment of post-accident income. If Mr. Welsh is correct, IRBs are calculated in the following sequence:

Step 1: Determine net weekly income [s. 6(1)].

Step 2: Take 80 per cent of the amount from Step 1, subject to a minimum of $185 for any week after the first 104 weeks of disability [s. 6(1)].

Step 3: Reduce the amount from Step 2 by any collateral benefits received or available [s. 7(1)1].

Step 4: Choose the lesser of the amount from Step 3 and $400 (or a greater amount if optional benefits were purchased) [s. 7(1)2].

Step 5: Increase the amount from Step 4 by 80 per cent of post-accident business losses, or reduce it by 80 per cent of net post-accident income [ss. 6(2) - (6)].

This calculation works in Mr. Welsh's favour because it means his IRBs, which I understand the parties agree to be $391,72,¹¹ will be increased by 80 per cent of his business losses even if this results in a weekly amount in excess of $400.

Economical's position, accepted by the Arbitrator, is that the amount payable for IRBs under the SABS-1996 is capped at $400 (unless optional benefits were purchased). In Economical's submission, the heading and introductory words of s. 6 suggest that it deals with the amount of IRBs, while s. 7 deals with subsequent issues: collateral benefits and the maximum amount of IRBs. It contends that introductory phrase in s. 7(1) — "Despite subsection 6(1), but subject to subsections 6(2) to (6)" — means that "the operation of section 7 simply rests on the assumption that the conditions in 6(2) to 6(6) have been met, to the extent those conditions do not contradict the requirements of section 7." Economical's interpretation suggests the following sequence:

Step 1: Determine net weekly income [s. 6(1)].

Step 2: Take 80 per cent of the amount from Step 1, subject to a minimum of $185 for any week after the first 104 weeks of disability [s. 6(1)].

Step 3: Increase the amount from Step 2 by 80 per cent of post-accident business losses, or reduce it by 80 per cent of net post-accident income [ss. 6(2) - (6)].

Step 4: Reduce the amount from Step 3 by any collateral benefits received or available [s. 7(1)1].

Step 5: Choose the lesser of the amount from Step 4 and $400 (or a greater amount if optional benefits were purchased).

Economical contends this is the most harmonious reading of the legislation, consistent with the intention to provide compensation for lost income, including recognition of business losses, but within a specified limit. Mr. Welsh's approach, it argues, would expose insurers to limitless liability for IRBs in the case of self-employed persons. As an example, it puts forward an insured person with pre-accident income sufficient to establish an entitlement of $400 per week, and weekly post-income business losses of $10,000. Using Mr. Welsh's approach, the insurer would be obliged to pay IRBs of $8,400 per week [$400 + (80% x $10,000)]. In Economical's submission, that could not have been the intention of legislation designed to stabilize automobile insurance rates.

Economical also argues that Mr. Welsh's approach would often work against insured persons who have post-accident income. For example, consider an insured person (who did not purchase optional benefits) with pre-accident net income of $700 per week, collateral benefits of $100 per week, and net post-accident income of $200. Using Mr. Welsh's approach, that person would be entitled to IRBs of $240, while Economical's approach would lead to IRBs of $300:

Mr. Welsh's approach

Economical's approach

Step 1: Net income

$ 700

Step 1: Net income

$700

Step 2: 80%

$ 560

Step 2: 80%0

$560

Step 3: Less collateral benefits of $100

$ 460

Step 3: Less 80% of net post-accident income ($200 x 80% = $160)

$400

Step 4: Lesser of Step 3 and $400

$ 400

Step 4: Less collateral benefits of $100

$300

Step 5: Less 80% of net post-accident income ($200 x 80% = $160)

$ 240

Step 5: Lesser of Step 4 and $400

$300

I have considerable sympathy for Economical's position, and suspect it reflects general practice. However, as Mr. Welsh forcefully argues, it is inconsistent with the plain meaning of the legislation. While the introductory phrase in section 7 may be ambiguous, s. 7(1)1 is not. It states that "the amount determined under subsection 6(1)" — not under section 6 or subsections 6(1) to 6(6) — is reduced by the insured person's collateral benefits. This amount is then compared with the $400 maximum (or a greater amount if optional benefits were purchased) in s. 7(1)2. According to the introductory wording of s. 7(1), this is the amount payable "[d]espite subsection 6(1) but subject to subsections 6(2) to (6)."

The problem with Economical's approach is that it requires treating s. 7(1)1 as if it read: "The amount determined under subsections 6(1) to (6)." This, in my view, would violate the principles of interpretation discussed in a number of recent decisions of the Ontario Court of Appeal. Most relevant is the following excerpt from Hope v. Canadian General Insurance and Christy Young (2001), 2002 CanLII 44899 (ON CA), 212 D.L.R. (4th) 247, a case dealing with the interpretation of the phrase, "benefit period" in the previous version of the SABS:

Counsel further contends that if the ambiguity he describes exists, the appellant, as the insured, is entitled to the benefit of the more favourable interpretation. Counsel relies on the contra proferentem rule; the principle that coverage provisions in insurance policies should be construed broadly; and the principle that ambiguous provisions in a policy should be read so as to give effect to the reasonable expectations of the parties.

These principles of interpretation are well known. Some or all have been applied in the many cases where the language used in insurance policies, or insurance related statutory or regulatory provisions, obscures as much, or more, than it reveals about the intended meaning. They operate, however, only where there is a genuine ambiguity as to the meaning of the impugned language: see, Chilton v. Co-Operators General Insurance Co. (1997), 1997 CanLII 765 (ON CA), 32 O.R. (3d) 161 at 167 (C.A.).

Ambiguity cannot be determined by examining words in isolation from the text in which they appear. Nor is ambiguity established by demonstrating that if the legislature had intended a particular meaning, it could have used different language that would have expressed that meaning more clearly. Not all language that falls short of crystal clarity is properly labelled ambiguous. A finding that a provision is ambiguous can be made only after a proper inquiry as to the meaning of the provision. The approach to be taken when construing legislative language is described by Professor Driedger in his text, Construction of Statutes, 2nd ed. (1983), at p. 87:

Today there is only one principle or approach, namely the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

I am unable to say that sections 6 and 7 of the SABS-1996 are ambiguous. Mr. Welsh has provided a straightforward interpretation that cannot be described as an absurdity, particularly on the facts of the case. In reaching this conclusion, I am comforted to some extent by s. 6(4), which creates some limits on business losses. According to this subsection, insured persons do not get credit for business expenses that are not reasonable or necessary to prevent a loss of revenue:

(4) For the purpose of subsection (2), net income from self-employment for an insured person who was self-employed at the time of the accident shall be determined without making any deduction for,

(a) expenses that were not reasonable or necessary to prevent a loss of revenue;

(b) salary expenses that were paid to replace the person's active participation in the business, except to the extent that those expenses were reasonable for that purpose; and

(c) non-salary expenses that were different in nature or greater than the non-salary expenses incurred before the accident, except to the extent that those expenses were necessary to prevent or reduce any losses resulting from the accident.

In my view, this provision gives insurers some control over an insured person who continues to operate a business in a manner that has little chance of generating revenues.

For these reasons, I conclude that the plain meaning must prevail. Mr. Welsh is entitled to have his IRBs calculated using his five-step approach, set out above.

I note that s. 7 of the SABS-1996 has been amended, effective October 1, 2003.¹² Subsection 7(1) now reads: "Despite subsections 6(1) and 6(5), but subject to subsection 6(2) . . ." Correspondingly, s. 7(1)1 now reads: "The amount determined under subsection 6(1) and (5) . . ."

While these amendments are of interest, neither party suggested they should affect my analysis. As provided in the Interpretation Act, R.S.O. 1990, c. amendments cannot be taken as a declaration about the previous state of the law.¹³ Nor, in my view, do these particular changes evidence a clear evolution in the law.¹⁴ However, if my analysis in this case is correct, the amendments represent the worst of all possible worlds for insured persons. Insurers get to include business losses in the s. 7(1)1 calculation, which means losses cannot increase IRBs above $400¹⁵ (unless optional benefits were purchased), but post-accident income is still deducted after the maximum is applied.

Finally, although my decision means that Mr. Welsh's IRBs must be recalculated, he is only entitled to an adjustment going back to the date of his amended Notice of Appeal. This is set out in the preliminary decision of Director's Delegate McMahon, dated April 23, 2003, allowing Mr. Welsh to add this issue to his appeal, subject to the following conditions:

First, Mr. Welsh has agreed that if the amendment is allowed he will limit his claim to the date of the amendment to a maximum of $400 per week. Second, Mr. Welsh has agreed that if Economical demands higher levels of proof regarding his expenses, he will not refuse to proffer such proof on the grounds that it is more than Economical's accountant had asked for in their meetings following the release of the arbitration decision. In addition, Mr. Welsh undertakes that if the amount of his IRBs is litigated or arbitrated, he will not seek to discredit the accountant on the basis that the level of proof he has demanded has shifted from what he sought in the meetings following the release of the Arbitrator's decision. (p. 5)

C. The Boat and Snowmobile

Rehabilitation benefits are payable under s. 15 of the SABS-1996. According to s. 15(2), the insurer is to pay for "reasonable and necessary measures undertaken by an insured person to reduce or eliminate the effects of any disability resulting from the impairment or to facilitate the insured person's reintegration into his or her family, the rest of society and the labour market."

Economical claims the Arbitrator erred in concluding that Mr. Welsh established his entitlement to rehabilitation benefits for the purchase of a new boat and snowmobile at a cost of approximately $75,000, less the trade-in value of his existing vehicles. It makes four arguments, addressed below.

First, Economical argues that the Arbitrator erred in relying on the testimony of Mr. Welsh's physician, Dr. Donna Ouchterlony. In its submission, Dr. Ouchterlony was not qualified to give evidence about the effectiveness of these measures, or to give evidence about whether the cost was reasonable. More specifically, Economical claims that:

Counsel for Mr. Welsh advised the Arbitrator that Dr. Ouchterlony was not being called to give expert opinion evidence;
Dr. Ouchterlony did not conduct or arrange a functional abilities evaluation to determine if a new boat and snowmobile would assist Mr. Welsh;
Dr. Ouchterlony left it to Mr. Welsh to find a boat and snowmobile that would meet his needs, and took no role in evaluating the cost; and
Dr. Ouchterlony did not discuss with Mr. Welsh how often he would use the boat and snowmobile, making it impossible for her to evaluate whether this was the most appropriate option.

Counsel's statement at the arbitration about Dr. Ouchterlony's role is somewhat confusing. However, as I read the transcript, Dr. Ouchterlony was not called as an expert in neuro rehabilitation, but clearly was called to explain her opinion that Mr. Welsh needed a boat and snowmobile with improved shock absorption. Indeed, the whole dispute was founded on her treatment plan, which she was entitled to sign as a medical practitioner. On cross-examination, counsel for Economical vigorously challenged Dr. Ouchterlony's opinion, but not her right to present it.

Consequently, I am not persuaded the Arbitrator erred in law in relying on Dr. Ouchterlony's evidence. The remaining issues, in my view, go to the Arbitrator's assessment of the evidence. Importantly, she did not rely solely on Dr. Ouchterlony. She also heard from Mr. Welsh and considered a report from Matt Sutherland, an occupational therapist commissioned by Economical to comment on the effectiveness of Mr. Welsh's treatment plan and the availability of less expensive alternatives. In my view, this evidence provided sufficient support for the conclusions reached and, therefore, there is no basis for interfering on appeal.

Second, Economical claims the evidence did not support the Arbitrator's conclusion, found at page 10 of her decision, that a new boat and snowmobile were needed "to reintegrate him [Mr. Welsh] into the labour market." In its submission, Mr. Welsh acknowledged that a new boat and snowmobile would not make any difference to the profitability of his business; he said he could do his managerial duties with his old equipment, and would not be able to do the physical work even if he had new equipment.

In my opinion, this is an overly technical reading of the evidence and the decision. Mr. Welsh may not have been entirely consistent in his testimony, but he provided some evidence that he thought the boat and snowmobile would help him maintain his lifestyle and improve his chances of maintaining his business.¹⁶ Although the Arbitrator's reasons focus on reintegrating Mr. Welsh into the labour market, the evidence clearly shows that his needs were interrelated. As Dr. Ouchterlony explained, the goal was to help him maintain his pre-accident lifestyle, including his work life, to the greatest extent possible. The problem was that he lived on an island and had limited employment options. I find no lack of evidence to support the Arbitrator's conclusion that Mr. Welsh needed a new boat and snowmobile to maintain his pre-accident lifestyle, including his work life.

Third, Economical submits that the Arbitrator erred in finding that the boat and snowmobile were necessary measures to enable Mr. Welsh to engage in employment that was as similar as possible to employment he engaged in before the accident. This argument substantially overlaps with the previous one and, in my opinion, there was evidence to support the conclusion that these purchases were necessary to help Mr. Welsh keep his business going.

Fourth, Economical argues that the Arbitrator erred in failing to consider the reasonableness of the treatment plan given the fact that Mr. Welsh had already settled his claim for the cost of relocating to the mainland. The Arbitrator dealt with this argument in a footnote, as follows:

In its final submissions, Economical argued that the issue of the new boat and snow machine was not properly before me because it related to Mr. Welsh's refusal to move his home and business from the island. Economical submitted that the matter had been settled by the release signed on August 2, 2000. I disagree, and in any event, it was not open to Economical, after each party had completed its presentation of the evidence and closed its case, to make this submission in final argument.

Economical contends that its argument at arbitration was not that the release prevented Mr. Welsh from claiming any costs related to living and working on the island, but only that it should have been a factor in assessing the reasonableness of his claim. Even if the Arbitrator misunderstood Economical's argument, I am not persuaded this is an error of law sufficiently serious to undermine the decision. Although Mr. Welsh's situation would have changed to some extent if he had moved to the mainland, he still would have needed to travel on the lake.

In oral argument, Economical also claimed the Arbitrator erred in failing to consider the $100,000 cap on medical and rehabilitation benefits. In its submission, there is good reason to question using the rest of Mr. Welsh's entitlement on a boat and snowmobile, leaving him with no access to other medical and rehabilitation benefits. I find some merit in this argument but, as the Arbitrator notes, Mr. Welsh is in the process of claiming that his impairments are catastrophic, which would substantially increase the cap on medical and rehabilitation benefits. More generally, I agree that insurers should make their insured aware of any caps and help them organize their care but, ultimately, it is up to the insured person to decide on the best use of limited treatment dollars.

III. APPEAL EXPENSES

At the appeal hearing, the parties agreed to attempt to resolve the issue of appeal expenses after receiving my decision. If resolution is not possible, either party may request a determination of appeal expenses by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.