Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2003 ONFSCDRS 38

Appeal P01-00059

Appellant

and

Respondent

Before:

Nancy Makepeace

Representatives:

R. Mitchell Rowe for Mr. El-Saikali

Ivan Luxenberg for Co-operators

Hearing Date:

July 31, 2002

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

The appeal is dismissed and the Arbitration order, dated November 21, 2001, is confirmed.
The parties shall bear their own appeal expenses.

March 13, 2003

Nancy Makepeace Director's Delegate

Date

Mr. El-Saikali appeals from the Arbitrator's decision dismissing his claim for income replacement benefits ("IRBs") under Part II of the SABS-1994¹ between May 17, 1997, when they were terminated, and April 3, 1998, the 104-week point.²

Although appeals are restricted to questions of law, the Arbitrator's assessment and weighing of the evidence was the main focus of Mr. El-Saikali's appeal. For reasons to follow, I am not persuaded the Arbitrator erred. I find there was more than sufficient evidence to justify his conclusion.

Apart from his challenge to the Arbitrator's factual findings, Mr. El-Saikali also raises two legal issues. He submits the Arbitrator erred in finding that the insured person continues to bear the onus of proving entitlement to benefits. In Mr. El-Saikali's view, an insurer who initially pays benefits, then terminates them, bears the onus of proving it was entitled to do so. For reasons that follow, I find no error.

Secondly, Mr. El-Saikali takes issue with the Arbitrator's decision to admit into evidence surveillance videotape prepared after the period for which benefits are claimed. This was a judgement call. Although I have some concern about the prejudicial effect of this kind of evidence, I am not persuaded the Arbitrator made an error of law in admitting the videotapes in this case. My reasons follow.

In any event, I find that the Arbitrator's decision, considered as a whole, was well within his authority, based on the evidence.

According to the Arbitrator's review of the evidence, Mr. El-Saikali was involved in a motor vehicle accident on the morning of April 3, 1996, while on the way to his job as a convenience store manager. Although his car was written off, his initial complaints were limited to lower neck pain, lower back pain and a seat belt injury. Mr. El-Saikali testified that after being released from hospital later that day, he dropped off some keys at the store and went home. He returned to work the next morning, but left after a few hours because of pain. Over the next three months, he attended the store every day for an hour to do the banking and open the cigarette case. Although his low back pain resolved by the late summer of 1996, his neck and mid-back pain started to get worse. He developed muscle pain and stiffness all over, became depressed and began to have problems with sleep, memory and concentration.

Mr. El-Saikali testified that he worked ten hours a day, seven days a week, before the accident, but remained unable to return to his usual work activities at the time of the hearing. In addition, he worked part-time as a welder for his brother's company about 16 hours a week, and operated a dating service. He was not able to resume work in either of these jobs after the accident.

Mr. El-Saikali's evidence was supported by the testimony of his mother, sister, brother and a co-worker. He also relied on a number of doctors who diagnosed chronic pain syndrome or fibromyalgia: Dr. S.C. Marshall, a physiatrist, and Dr. A.V. Jovaisas, a rheumatologist, who saw him in early 1998, Dr. E.A. Day, a physiatrist who saw him in December 1999, Dr. E.N. Thompson, an anesthesia and chronic pain management specialist who saw him in March 2000, and Dr. Dan Sweet, a general practitioner specializing in addiction medicine and chronic pain management, who began treating him in December 1999. All these doctors reported Mr. El-Saikali's complaints of chronic disabling pain.

Mr. El-Saikali also presented evidence about psychological problems that he relates to the accident. This evidence came from Dr. Juan E. Tejeda, a psychiatrist who assessed him in August 1996, Terence M. Skillen, a social worker who provided supportive counselling and chronic pain management counselling beginning in December 1996, and Drs. Peter R. Henderson and Gilles Hebert, psychologists who saw him in 1997. In July 1997, Mr. Skillen reported, "Given his present level of cognitive and physical functioning, Mr. El-Saikali is not likely to resume gainful employment nor participate in other activities of life at anywhere near the level enjoyed by him prior to the onset of chronic pain." Dr. Henderson diagnosed a pain disorder with associated psychological factors, and reported that Mr. El-Saikali presented with some of the symptoms of post-traumatic stress disorder.

The dispute was heard over four days in February 2001. Apart from Mr. El-Saikali and the lay witnesses who supported his claim, the Arbitrator heard from Dr. Sweet, and three experts called by Co-operators – Dr. Jack Klein, a psychiatrist, and Drs. K.P Sitaram and Perry Rush, physiatrists. His decision is resounding in its dismissal of Mr. El-Saikali's claim.

A. Assessment of the Evidence

Mr. El-Saikali submits that the Arbitrator erred in his interpretation of the evidence when he found that Mr. El-Saikali did not suffer a physical or psychological impairment as a result of the accident. Specifically, he submits that the Arbitrator ignored coherent and credible evidence from the lay witnesses and the experts who supported his position. He submits that the Arbitrator misinterpreted and misrepresented the surveillance evidence, which, in his view, did not show he could work. He argues that the Arbitrator erred in finding that he misled the experts about his pre-accident history. Medical records show that Mr. El-Saikali has complained of low back sysmptoms since the early '90s, and his symptoms worsened after a motor vehicle accident in March 1994. Contrary to the Arbitrator's conclusion, Mr. El-Saikali contends that he disclosed the 1994 accident to 14 of the 20 medical experts he saw after the 1996 accident. He submits there was no clear and compelling evidence that he is malingering. He argues that the Arbitrator's decision focused almost exclusively on credibility and paid little regard to the evidence in his favour.

Mr. El-Saikali argues that the Arbitrator's ultimate conclusion is inconsistent with the acknowledgement that his life "changed significantly" after the accident. I agree that this comment is rather puzzling in the context of the decision, but it matters little, because of the compelling evidence that supported the Arbitrator's conclusion. I also reject Mr. El-Saikali's argument that the Arbitrator applied the wrong tests for impairment and disability. The Arbitrator stated the law correctly at pages 17-18 of his decision, and carefully analysed its application at pages 28-37.

The main focus of the decision was the Arbitrator's finding that Mr. El-Saikali was not credible. I would be concerned if an exclusive focus on credibility diverted the Arbitrator's attention from the ultimate question of disability. However, reading the decision in it entirety, I am persuaded that the Arbitrator's decision to dismiss Mr. El-Saikali's benefit claim was amply supported by the evidence. To the extent that review of an arbitrator's factual findings is available on appeal, Mr. El-Saikali's submissions fall far short of what is required.

Although there was evidence that Mr. El-Saikali may have suffered a thoracic or lumbosacral disc injury prior to the April 1996 accident, there was no evidence this accident caused further organic injury. The weight of the expert opinion was that Mr. El-Saikali's post-accident symptoms were probably mechanical or myofascial in origin. This meant that Mr. El-Saikali's case depended on his statements about the effect of the accident.

The Arbitrator rejected the expert opinions that supported Mr. El-Saikali's case because they relied on his inaccurate statements about his pre-accident health and work history, and his symptoms and functional level after the accident. For example, the Arbitrator found that Mr. El-Saikali gave widely varying accounts about how many hours he worked before the accident, how well he had recovered from his March 1994 accident by the time of the April 1996 accident, and how many hours he was able to work at the store after the April 1996 accident. These were important discrepancies.

Particularly damaging was evidence that Mr. El-Saikali complained of intermittent low back pain starting in the early '90s, which, after the 1994 accident, became constant and more severe, radiating down his left leg. He also complained of chronic mid-back symptoms which doctors thought might be related to bullet fragments from a gunshot wound suffered many years earlier. The evidence about Mr. El-Saikali's pre-accident back problems came from his own doctors: Drs. Max della Zazzera and Wasfy Saleh, family doctors, Dr. Z. Dhalla, a neurologist, Dr. Garth Johnson, an orthopaedic surgeon, and Dr. Reda El-Sawy, a physiatrist.

Dr. El-Sawy's reports were particularly damaging. He assessed Mr. El-Saikali at the request of his family doctor in late 1995 (about four months before the accident) and assessed him again, this time for Co-operators, in July 1996. He found no signs of physical impairment on either occasion. More importantly, he reported that there was no significant functional change, either physically or psychologically. In an October 1996 report, Dr. El-Sawy reported that on November 27, 1995, Mr. El-Saikali complained that his legs were getting weaker and he wondered whether he should quit his job. Dr. El-Sawy advised him not to do that. This exchange is reflected in the doctor's clinical note for that day. These reports are in stark contrast to Mr. El-Saikali's testimony that he reduced his hours from about 130 to about 70 hours per week after the March 1994 accident. There was no change in Dr. Dr. El-Sawy's opinion when he examined Mr. El-Saikali again in February 2000 and February 2001.

In addition, many experts reported that Mr. El-Saikali's behaviours and complaints were out of keeping with his organic injuries. This can indicate malingering, but may also result from involuntary psychological factors. However, the experts were divided about whether Mr. El-Saikali suffered a psychological impairment as a result of the accident. The Arbitrator preferred the evidence of the Insurer's experts. Drs. A. Tellier and James Blackburn, neuropsychologists, reported that Mr. El-Saikali's test results were unreliable, and the memory problems he reported were likely related to other factors, such as "pain, psychological distress, questionable motivation, and personality variables."

Dr. Selwyn Smith, a psychiatrist, examined Mr. El-Saikali for Co-operators in August 1996. He found no evidence of post-traumatic stress disorder, generalized anxiety disorder, major depression or other psychological impairment.

Dr. Denton C. Buchanan, a psychologist who assessed Mr. El-Saikali as part of a Disability and Medical-Rehabilitation DAC³ in September 1996, did not believe he had the emotional distress he presented in a disability questionnaire. Dr. Buchanan concluded that Mr. El-Saikali's pain behaviour and psychological attitudes were out of keeping with the consequences of the accident, and that underlying personality factors caused him to need attention and support.

Dr. Jack Klein, a psychiatrist, examined Mr. El-Saikali for Co-operators in June 1999. He concluded that Mr. El-Saikali's complaints were a continuation of pre-accident problems, and were not disabling. He questioned Mr. El-Saikali's motivation for "tak[ing] on the identity of a disabled person." After viewing surveillance videotapes obtained a few weeks after he first saw Mr. El-Saikali, Dr. Klein concluded that Mr. El-Saikali was consciously amplifying his pain. Dr. Klein's evidence was very damaging to Mr. El-Saikali's case, and the Arbitrator took some time in his reasons to explain why.

Mr. El-Saikali had a Functional Capacities Evaluation ("FCE") in June 1996 at the request of Co-operators. Marc Dignard, the physiotherapist who conducted the assessment, reported that Mr. El-Saikali's physical strength would not meet the critical demands of his job as a convenience store manager, especially because of restrictions in lifting, carrying and standing. On appeal, Mr. El-Saikali submits that the Arbitrator erred in dismissing this report, though the Insurer did not do so at the time; they continued paying benefits. However, the FCE report provided only qualified support for Mr. El-Saikali. Numerous testing discrepancies were noted, and the assessors cautioned that the results "may not provide a reliable indicator of Mr. El-Saikali's present abilities and limitations." They recommended that Mr. El-Saikali return to modified work half-days, five days a week, gradually resuming full-time hours and duties. As the Arbitrator noted, an FCE conducted as part of a Medical-Rehabilitation DAC in September 1996 came to similar conclusions with respect to both demonstrated abilities and reliability. Neither report is of much assistance to Mr. El-Saikali's claim for benefits between May 1997 and April 1998.

The Arbitrator preferred the medical evidence presented by the Insurer. In addition to the evidence of Drs. El-Sawy, Klein and Buchanan, Co-operators relied on reports prepared by Dr. K.P. Sitaram, a physiatrist who assessed Mr. El-Saikali for the DAC assessment in September 1996, and Dr. Perry Rush, also a physiatrist, who assessed Mr. El-Saikali at Co-operators' request in June 1999. Their reports were to similar effect. Dr. Sitaram reported that he could find no objective evidence of injury. It was his opinion that Mr. El-Saikali demonstrated significant pain behaviour that was out of keeping with his accident-related injuries and interfered with his rehabilitation. He believed the 1996 accident exacerbated Mr. El-Saikali's pre-existing back pain, though he found it difficult to estimate how much. He did not believe Mr. El-Saikali was disabled.

Dr. Rush concluded that the accident did not cause any physical impairment and Mr. El-Saikali was not disabled from working. He noted inconsistencies and non-organic signs, including self-reported pain on the slightest touch, pain over the entire body, and very poor grip strength testing. He confirmed his opinion after reviewing further information in August 1999, February 2000 and January 2001.

Not every discrepancy indicates malingering or misrepresentation. But the arbitrator must be able to rely on the insured person's evidence about the impact of the accident, absent objective evidence of impairment. The insured person must at least provide a coherent account of what happened. Mr. El-Saikali's widely varying explanations about his problems left the Arbitrator with almost no persuasive evidence about his claim. Indeed, the pattern of discrepancies suggested deliberate misrepresentation. I find no error in the Arbitrator's interpretation or assessment of the evidence.

B. Admission of Surveillance Post-dating the Benefit Period

Co-operators relied on surveillance of Mr. El-Saikali obtained in mid-1996 and late 1999. The Arbitrator found that while the May 1996 surveillance (obtained shortly after the April 1996 accident) showed some evidence of neck or upper back stiffness, the July 1996 surveillance showed "significant improvement."⁴ The 1996 surveillance showed Mr. El-Saikali attending at the store for longer than he and his co-worker stated, and generally being "active in standing, twisting, bending, walking and driving." This contradicted Mr. El-Saikali's testimony and his statements to several doctors at that time about his pain. The 1999 surveillance showed even more activity.

Mr. El-Saikali submits, on appeal, that the Arbitrator erred in admitting the 1999 surveillance, which post-dated the period for which he claims benefits (May 18, 1997-April 3, 1998). He argues that this surveillance was not relevant to the issues in dispute or, alternatively, that the prejudice to Mr. El-Saikali from admitting it outweighed any marginal probative value it might have had.

The increased activity shown on the 1999 surveillance might not be relevant if Mr. El-Saikali had conceded that his condition had improved. However, he did not admit to any functional improvement. The surveillance evidence undermined Mr. El-Saikali's case because it contradicted important evidence he relied on. The Arbitrator referred to the 1999 surveillance at a number of places throughout the decision, but the following passage summarizes its effect:

[Mr. El-Saikali] is working at the store for several hours at a time (on two occasions, from early afternoon until after midnight), helping customers, assisting employees behind the counter, moving products and stocking the shelves. Mr. El-Saikali also runs errands on these days. Throughout this time, Mr. El-Saikali walks easily and briskly, stands for lengthy periods of time, and bends, lifts and squats with no apparent difficulty. At one point in the hearing, Mr. El-Saikali denied that he was standing, when the tape clearly showed him standing behind the counter helping an employee to serve customers. The 1999 tapes are clearly inconsistent with Mr. El-Saikali's and his family's evidence that he did not return to work after the accident and was essentially housebound, except for some brief times at the store to take care of administrative duties. The tapes also stand in stark contrast to Dr. Sweet's evidence that, in 1999, Mr. El-Saikali was a "shadow of what he is today" and that he was suffering from a major depression. Dr. Sweet also testified that Mr. El-Saikali had said that, after the 1996 accident, he might have "two to three good days" and that he could only stock milk crates for approximately an hour. None of the other witnesses suggested that Mr. El-Saikali could do any sort of significant work for two to three days at a time, and made no mention at all of him stocking milk crates. Dr. Klein correctly noted that the tapes clearly contradict Mr. El-Saikali's claim that he had not been back to work at all since a brief period following the accident.⁵

Obviously, this would be very damaging evidence if Mr. El-Saikali claimed that he continued to qualify for IRBs during the surveillance period. What probative value did it have with respect to his functional level a year or two earlier? One of the dangers in focussing on surveillance evidence is that a dispute about disability may be transformed into an open-ended enquiry into credibility and character. This has potential to expand the length and scope of the hearing and divert attention from the central issue of disability. In my view, a cautious approach is appropriate. However, the insured person's credibility is an important issue in chronic pain cases because of the lack of objective evidence to explain the pain and disability claimed.

I would be more concerned with the Arbitrator's admission of the 1999 surveillance evidence if Mr. El-Saikali had not relied on a number of medical reports obtained in 1999 and after. On appeal, Mr. El-Saikali submits he relied on these reports only with respect to his condition during the claims period. I am unable to read them in such a limited way.

Mr. El-Saikali relied on reports by Dr. Day and Dr. Thompson prepared during the same period. On December 18, 1999, Dr. Day reported his impression that Mr. El-Saikali suffered from myofascial syndrome or fibromyalgia, and suspected a mechanical joint blockage. His report indicates that Mr. El-Saikali told him "he has pain 'all over' and 'everywhere', ever since a motor vehicle collision in 1996."⁶ Dr. Thompson did not see Mr. El-Saikali until March 2000. She diagnosed "myofascial pain syndrome which is quite severe and disabling,"⁷ for which she treated him in 1999 and 2000.

Dr. Sweet, who strongly supported Mr. El-Saikali's claim and testified on his behalf at the hearing, first saw Mr. El-Saikali on December 3, 1999.⁸ He concluded that "from 1996 to 1998 and following, Mr. El-Saikali suffered chronic pain disability and/or fibromyalgia as a result of the 1996 accident."⁹ He based this opinion on his review of the medical reports and his treatment of Mr. El-Saikali in 1999 and 2000. He testified that he had no reason to doubt Mr. El-Saikali's presentation. As the Arbitrator stated in the quoted excerpt, Dr. Sweet testified that "in 1999, Mr. El-Saikali was 'a shadow of what he is today' and that he was suffering from a major depression." This testimony was consistent with Dr. Sweet's report of October 6, 2000, which addressed Mr. El-Saikali 's condition in 1999 and 2000. That it was inconsistent with the surveillance evidence at the time was relevant and had substantial probative value.

This was not the Arbitrator's only reason for dismissing Dr. Sweet's evidence, however. Another reason was Dr. Sweet's admission that he had not seen the reports of Drs. El-Sawy, Sitaram and Rush, the experts Co-operators relied on, and "if he had, he would have questioned whether the 1996 accident was the sole cause of Mr. El-Saikali's problems."¹⁰ Finally, Dr. Sweet testified that he considered part of his role to be an advocate for his patients, and he felt Mr. El-Saikali had not been treated fairly in his claim. I find no error in the Arbitrator's dismissal of Dr. Sweet's opinion.

The 1999 surveillance evidence also bolstered the evidence of Dr. Klein, the psychiatrist who examined Mr. El-Saikali at Co-operators' request in June 1999.¹¹ Mr. El-Saikali told Dr. Klein that he could not work since the accident, and trying to work aggravated his pain. In his first report, Dr. Klein stated that "the current clinical picture constitutes a continuation of a pre-existing clinical picture involving chronic unexplained physical symptoms, lack of objectively demonstrable organic pathology, lack of response to treatment, and strong perpetuating factors involving primary and secondary gain." In February 2000, Dr. Klein reported that the 1996 and 1999 videotapes had not changed his opinion. In fact, the tapes were inconsistent with Mr. El-Saikali's presentation in Dr. Klein's office. Most importantly, the videotapes showed he could work "shifts of several hours duration" a few weeks after Dr. Klein saw him.¹² According to the Arbitrator, Dr. Klein testified that though he had initially thought Mr. El-Saikali showed both voluntary and involuntary somatization, the videotapes "tipped the balance" in favour of conscious exaggeration of his pain.

The Arbitrator accepted Dr. Klein's evidence because the doctor was initially prepared to state that Mr. El-Saikali suffered from a psychogenic chronic pain condition (suggesting a more impartial assessment) and he had a more complete understanding than some of the other experts about Mr. El-Saikali's pre- and post-accident history, including some of the key discrepancies. But Dr. Klein was not alone in his assessment. It was also supported by Dr. Rush and Dr. El-Sawy, neither of whom saw the videotape evidence. Dr. El-Sawy's evidence was particularly persuasive because he had seen Mr. El-Saikali in consultation before the accident, and reported he found little difference in his condition.

In summary, since Mr. El-Saikali put his condition in 1999 and 2000 in issue by claiming ongoing disability, Co-operators was entitled to rely on the evidence it had with respect to the same period of time. In addition, though the 1999 surveillance evidence provided important support for Co-operators position, it was not essential. I have little doubt the outcome would have been the same if it had not been admitted. The Arbitrator's ultimate conclusion was well supported by his analysis of the expert reports and the discrepancies in Mr. El-Saikali's evidence that did not depend on the surveillance evidence.

For these reasons, I am not persuaded the Arbitrator erred in admitting the 1999 surveillance videotapes.

C. Onus of Proof

The Arbitrator rejected Mr. El-Saikali's submission that Co-operators bore the onus of proving he was no longer entitled to benefits after May 17, 1997:

Section 7(1) of the Schedule states that an insured person is entitled to a weekly income replacement benefit if the insured person meets any of a number of qualifications, including whether, as a result of the accident, the person suffered a substantial inability to perform the essential tasks of his or her preaccident employment. Counsel for Mr. El-Saikali, Mr. Rowe, submitted that an insured only bears the onus of establishing a prima facie case of entitlement and that the onus then shifts to the Insurer to disprove the person's entitlement, particularly where, as here, the Insurer initially paid, but then terminated, benefits. I reject this. I find that the Schedule clearly places the onus on the insured to establish entitlement to income replacement benefits, regardless of the payment and subsequent termination of benefits by the Insurer. Arbitration decisions have consistently taken this approach¹³ and I see no reason to depart from it now. However, even if the burden is as suggested by Mr. Rowe, I find that the Insurer has discharged the onus of demonstrating that Mr. El-Saikali was not substantially disabled from his job as a result of the accident.¹⁴

On appeal, Mr. El-Saikali submits that was an error of law. It is his position that the insurer bears the onus of justifying its decision to terminate benefits once it has accepted initial entitlement and started paying benefits. He relies on a number of court decisions about long-term disability policies, and argues that the same principle should apply in accident benefits cases.

The main case on which Mr. El-Saikali relies is Caisse Populaire de Maniwaki v. Giroux, a decision of the Supreme Court of Canada.¹⁵ This was a mortgage insurance case. When Giroux was disabled by a back injury, her insurer paid her mortgage interest for almost three years. Payments were stopped when she refused to provide a medical certificate attesting to her condition. At trial (Quebec Superior Court), the judge found that the burden of proof was on Giroux, and the preponderance of medical evidence was that she was not chronically disabled. The Court of Appeal agreed. The Supreme Court of Canada granted leave to appeal on one issue: "Where payments have been made under a disability insurance policy, does the onus shift to the insurer to establish that the insured is no longer disabled before payments may be discontinued?" The five-members of the panel were unanimous in answering this question in the affirmative.

Writing for La Forest, Sopinka and Cory JJ., Gonthier J. distinguished between the burden of proof in the judicial context and an insured person's contractual obligation to provide the insurer with evidence of initial and continuing disability, failing which, the insurer is entitled to stop payments based on non-performance of a contractual obligation:

Clearly the onus is on the insured to present evidence of continuation of her disability to her co-contracting party, and not on the insurer to establish cessation of the disability. [para.48]

Turning to the judicial burden of proof, Gonthier J. held that the insurer bore the burden of proving its contention that its insured was no longer disabled. However, though the trial and appellate courts erred with respect to the burden of proof, the appeal was dismissed because the preponderance of evidence was against Giroux. L'Heureux-Dubé J. dissented on this point only. She would have ordered a rehearing on the basis of the correct burden of proof.

Caisse Populaire was a Civil Code case, and turned on Giroux's failure to provide proof of disability as required under the policy. Subsequent decisions reveal a divergence of views as to its significance. As I read these cases, they are really about the shifting evidentiary burden of proof, not the ultimate legal burden of proof.¹⁶ At the end of the day, absent a presumption clause, it is for the insured person to prove ongoing entitlement to the benefits claimed.¹⁷ What Caisse Populaire says is that an insured person must be prepared to provide proof of disability, as required under the contract, and the insurer must be prepared to explain to the court why it terminated benefits. For example, in a case where the plaintiff brought persuasive expert reports of disability, and the insurer relied exclusively on a "paper review" prepared by Dr. Hall after benefits were terminated, Molloy J. ordered the insurer to pay interlocutory benefits for the following reasons:

While benefits only continue to be payable as long as the insured remains disabled, it is not open to an insurer to simply change its mind about continuing benefits without a sound reason for doing so. In these circumstances, there will be an onus on the insurer at trial to justify the discontinuation of benefits and to demonstrate that the plaintiff no longer meets the terms of the disability policy: Caisse Populaire de Maniwaki v. Giroux, 1993 CanLII 151 (SCC), [1993] 1 S.C.R. 282; Ritch v. Sun Life Assurance Co. of Canada, [1998] O.J. No. 2266 (Gen.Div.); Tarrant v. Manufacturer's Life Insurance Co., [1995] N.J. No. 2999 (Nfld. S.C.); Renouf v. Standard Life Assurance Company, 1996 CanLII 8220 (ON CTGD), [1996] O.J. No. 3354 (Gen.Div.). For present purposes, it is not necessary for me to determine whether the insurer will bear the primary onus of proof or whether this is merely a shifting evidentiary burden. On the facts of this case, such a characterization will have little impact on the result. On the current state of the medical record, and given the onus on the insurer, the plaintiff has demonstrated a very strong position on the merits.¹⁸

The Commission's adjudicators have applied a similar analysis in the accident benefits context. Decisions are made based on the preponderance of the evidence. Only where that analysis does not dictate a result does the burden of proof become relevant.¹⁹ The Commission's decisions are unanimous in holding that at the end of the day the insured person bears the burden of proving entitlement to the benefits claimed. But a distinction is made between the ultimate legal burden of proof, which remains on the insured person, and the secondary, tactical or evidentiary burden, which may shift back and forth between the parties depending on the strength of the evidence and the proposition to be proved.²⁰ This is consistent with well-established rules of evidence.²¹

The shifting burden of persuasion also depends on the parties' procedural obligations. Part XV of the SABS-1994 sets out a detailed procedural code that places different obligations on the insured person and the insurer at different stages of the claims adjustment and adjudication process, with various consequences for an insurer's obligation to pay benefits. The shifting obligations of the parties have been considered in numerous Commission decisions. The key provision, for the purpose of this appeal, is s. 64, which governs the stoppage of weekly benefits. Subsection 64(2) requires an insurer to give notice, including the reasons for stopping payment. Where the stoppage is based on an insurer examination report, s. 65(3) requires that it be produced to the insured person. The stoppage notice must set out the prescribed information about the DAC process, and if the insured person requests a DAC, the insurer must continue to pay benefits until the report is received. Both parties must abide by the report pending resolution of the dispute. Ultimately, the matter is decided by an arbitrator based on all the evidence given by both parties. An insurer that "simply changes its mind" without fairly considering all the available information risks a special award under s. 282(10).²² The same rules apply at the 104-week point and beyond. An insurer may not terminate benefits just because of the passage of time, without making reasonable enquiries into the condition of the insured person.²³

The question of the "shifting burden" arises most frequently in "suitable employment" cases because very often the insured person lacks the knowledge or skill to investigate the job market and, in any event, takes the position that he is totally disabled from any work. The insurer, on the other hand, may identify jobs that are of no interest to the insured person or are otherwise unsuitable. The result, in the hearing room, is a deficiency of persuasive evidence about suitable alternative jobs. Questions of onus become important in these cases.

The leading Commission case is Henriques and Motor Vehicle Accident Claims Fund.²⁴ Because MVAC paid weekly benefits under s. 12 of the SABS-1990 for more than 156 weeks before terminating them, Mr. Henriques submitted that it bore the burden of proving he could engage in suitable employment in accordance with s. 12(5)(b). He relied on several court decisions to that effect.²⁵ MVAC relied on Commmission decisions holding that the onus remains on the insured person to prove ongoing entitlement to benefits. Arbitrator Renahan found the two lines of cases were reconcilable. Ultimately, he did not find it necessary to rely on the burden of proof because he was satisfied that Mr. Henriques was not entitled to the ongoing benefits he claimed.

Confirming the decision, Director's Delegate Draper expanded upon the Arbitrator's reasoning:

Although he did not regard it as essential to his decision, the arbitrator responded to the parties submissions about the burden of proof in post-156 week cases. He dealt with the distinction between legal and evidentiary burdens of proof, concluding that the legal burden is on the insured person to prove he is continuously prevented from engaging in suitable employment. He also concluded that the evidentiary burden is on the insured person. However, if the insurer claims there is specific, suitable employment the insured person can do, it has the evidentiary burden of providing evidence to prove that point. If the insurer meets that evidentiary burden, the obligation shifts to the insured person to present evidence to refute the assertion.

The arbitrator also dealt with Mr. Henriques argument that MVAC conceded his disability by paying weekly income benefits beyond the 156-week mark and, therefore, had an additional burden of proving that his condition had changed since the decision was made to pay benefits. He found "little merit" in this argument, stating as follows:

If accepted, this argument would discourage insurers from making payment because, in nearly every case, evidence of payment would cast upon the insurer the burden of proving that the insured was not entitled to further payments. However, even if the duration of payments casts an evidential burden on the Insurer in this case, the Insurer satisfied it by explaining that it terminated weekly benefits after four and a half years on November 6, 1994 as a result of assessments which were conducted in September 1994. (Decision, p.14)

The arbitrator went on to say that although he addressed the burden of proof issues, this was not a case where he was left in a state of uncertainty. At page 14 of the decision, he states that he "could make findings on the various evidential issues without having to consider who had the burden of proof." Mr. Henriques accepts that this assessment of the evidence makes much of the burden of proof analysis unnecessary. He submits, however, that the arbitrator erred in failing to deal adequately with the consequences of MVAC paying benefits beyond the 156-week mark.

Like the arbitrator, I find little merit in this argument, particularly in the context of this case. Counsel argued that the onus should shift to the insurer because an insured person might rely on the payment of benefits to his or her detriment. For example, he or she might not pursue retraining on the understanding that the insurer accepted that it was premature. However, this was a general submission. There was no suggestion that Mr. Henriques suffered any such prejudice.

Entitlement to weekly benefits is an ongoing issue, with the onus on the insured person. The evidence required to meet this onus, however, will vary in each case. Where there is no contrary information, a medical form from the family doctor may be sufficient. If entitlement is less clear, however, the insurer can ask for additional information or require an examination under section 23(2) of the Schedule. Beyond the initial application, however, there is no rigid formula to determine which party must present what type of evidence at various points along the way.

The Schedule creates an obligation on insurers to pay benefits promptly, with penalties if they do not. As a result, insurers will often pay benefits where entitlement is uncertain. However, if the insurer concludes that ongoing entitlement has not been established, it can terminate the person's weekly benefits. The mere fact that it paid benefits does not shift the onus to the insurer. It is the nature and strength of the evidence, not the payment of benefits, that shifts the evidentiary burden.²⁶

I agree.

Director's Delegate Naylor took the same approach in H.K. and Canadian Surety Company, another case that dealt with the post-156 week entitlement test under s. 12(5)(b) of the SABS-1990. In that case, the Insurer submitted that the insured person had not offered any evidence to prove there was no suitable work she could do. It relied on a number of Commission decisions that imposed a "positive obligation" on an applicant to identify suitable work that he could not do because of accident-related impairments.²⁷ I agree with Delegate Naylor's treatment of those decisions:

The onus of proof in accident benefits cases and under other disability policies has been the subject of much jurisprudence. The ultimate, or legal, burden of proving eligibility for statutory accident benefits resides with the insured. The insured will lose the case, when all is said and done, if he or she does not establish the requisite level of disability to the usual civil standard. But how much evidence is enough? In the oft-cited case, Campbell v. Canada Life Assurance Co. (1990), 45 C.C.L.I. 79, the Manitoba Court of Appeal framed the question in these terms (p.78):

Accepting that the onus rests upon the plaintiff to establish on a preponderance of evidence that he comes within the provisions of . . . the policy, the question arises how much evidence must be presented by the plaintiff to satisfy that onus. The plaintiff is not required to prove every possible negative - that is, that he is unable to perform any and every conceivable job.

The question boils down to what is reasonable. The cases indicate that neither the insured nor the insurer should be held to unreasonable requirements.

In my view, the arbitration decisions on which Canadian Surety relies simply reflect the longstanding recognition that sincere but unsuccessful rehabilitation efforts go a long way towards proving disability. Conversely, failure to take such steps is likely to work against a claimant unless there is some explanation such as evidence of total disability. I do not view the decisions as establishing a rigid proposition that insureds must "provide evidence of suitable employment" to prove their claim. The appropriate approach is a flexible, fact-based one, in which, while the legal onus always remains on the insured, the sufficiency of the proof depends on what is reasonable in the circumstances. This involves consideration of the evidence presented by both parties, including the nature of the individual's condition and extent of the disability, the efforts the insured has made to position himself or herself to return to the workforce, the vocational assistance made available by the insurer and the options for alternative work that have been put forward.²⁸

In my view, the same analysis applies in cases, like this one, where an insurer terminates benefits before any change in benefit entitlement.²⁹ I can do no better than to reiterate Delegate Draper's comments in Henriques and MVAC:

The mere fact that [an insurer] paid benefits does not shift the onus to the insurer. It is the nature and strength of the evidence, not the payment of benefits, that shifts the evidentiary burden.³⁰

I find that the Arbitrator did not err in ruling that Mr. El-Saikali bore the onus of proving ongoing entitlement to income replacement benefits. In any event, it is clear from the Arbitrator's reasons that the decision did not turn on the burden of proof. The Arbitrator clearly found that the preponderance of evidence supported Co-operators' position. I am not convinced this conclusion was in error on any standard of review.

IV. EXPENSES

Mr. El-Saikali's challenge to the Arbitrator's assessment of the evidence had very little merit, and fell far short of establishing an error of law. His challenge to the Arbitrator's ruling with respect to onus of proof was legitimate, but had little chance of success. However, his appeal with respect to the Arbitrator's reliance on surveillance evidence, though unsuccessful, raised an important issue that is of continuing interest in accident benefit adjudication. Both parties dealt with the appeal in a focussed and cost-effective manner. I do not find it appropriate to make an expenses order. Each party shall bear its own appeal expenses.