Sivaharan Kulasekarampillai v. State Farm Mutual Automobile Insurance Company, 2004 ONFSCDRS 12

FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2004 ONFSCDRS 12 FSCO A03-001063

BETWEEN:

SIVAHARAN KULASEKARAMPILLAI Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON A MOTION FOR INTERIM BENEFITS

Before: William J. Renahan

Heard: December 23, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: David S. Wilson, Barrister and Solicitor, for Mr. Kulasekarampillai Jonathan B. Schrieder, Barrister and Solicitor, for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Sivaharan Kulasekarampillai, was injured in a motor vehicle accident on December 18, 2002. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm terminated housekeeping benefits of $100 per week on March 25, 2003 and income replacement benefits of $400 per week on May 3, 2003. The parties were unable to resolve their disputes through mediation, and Mr. Kulasekarampillai applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

In this motion, Mr. Kulasekarampillai applies for interim housekeeping benefits and income replacement benefits pending the hearing of his application for arbitration which is scheduled to commence on July 19, 2004.

I advised the parties of my decision on interim benefits on January 9, 2004. Following are my reasons.

The issue on this motion is:

1. Is Mr. Kulasekarampillai entitled to interim housekeeping benefits and interim income replacement benefits pursuant to section 279(4.1) of the Insurance Act?

Result:

1. The application for interim housekeeping benefits and interim income replacement benefits is dismissed.

Background:

Applications for interim benefits are normally dealt with in a summary fashion and I accepted affidavit and documentary evidence. Over the objection of Mr. Wilson, I allowed Mr. Schrieder to cross-examine Mr. Kulasekarampillai briefly on those parts of his affidavit in which he alleged that his financial circumstances were serious and of an urgent nature. This evidence goes to the heart of an application for interim benefits and it is unfair to an insurer that I make a decision on the urgency of this matter on untested allegations.

Mr. Kulasekarampillai was injured in a high speed collision on the 401 highway on December 18, 2002. He was assessed in the emergency department of a hospital and released the same day. His family doctor diagnosed cervical, dorsal and lumbar strain and anxiety leading to insomnia. Because of what he found as an unusual delay in improvement, he referred Mr. Kulasekarampillai to an orthopaedic doctor. I received no evidence from the orthopaedic doctor.

On November 19, 2003, a psychologist submitted a treatment plan and opined that Mr. Kulasekarampillai is experiencing significant post-traumatic anxiety which interferes with his ability to function. Mr. Wilson submitted that Mr. Kulasekarampillai is also disabled from a psychological impairment.

Law:

Arbitrators generally agree that they should make determinations on entitlement after a full hearing in which each side is given a fair opportunity to present their case. Section 279(4.1) of the Insurance Act gives arbitrators the discretion to make an interim order pending a final order. Arbitrators generally agree that this discretion may be exercised where an applicant demonstrates an urgent need for a determination that cannot wait for a full hearing. Usually the evidence to satisfy this criterion concerns the applicant's financial needs.

Arbitrators do not agree on the standard of proof they should apply to the merits of the applicant's case. On one end of the spectrum, the test is expressed as:

... an Applicant must establish a prima facie case, in the sense that "the insured person must produce evidence which, if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement."²

On the other end of the spectrum, the test is expressed as:

... the standard of proof should be somewhat higher than at a hearing ... the arbitrator should find it not only reasonable, but also very probable, that an applicant will be found to be entitled to the benefits sought.³

In Federow and Kingsway General Insurance Company,⁴ I said: "I believe the standard of proof varies depending on the urgency and the potential prejudice to the insurer in granting an interim order."

In a recent decision, Traynor v. Unum Life Insurance Company of America,⁵ the Divisional Court of the Superior Court of Justice expressed the criteria the Courts consider in an application for a mandatory interlocutory injunction. This case was an appeal by an insurer from an order granting a mandatory interlocutory injunction requiring it to pay periodic disability benefits to the plaintiff pursuant to the provisions of a group disability policy. The motions judge considered the application under three headings: the merits of the case, whether the applicant would suffer irreparable harm if the Court did not grant interim relief, and who the balance of convenience favoured.

These three criteria are set out in a decision of the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General)⁶ Although RJR-MacDonald was a civil charter case for injunctive relief, the Courts consider the same criteria for interim relief. The test the Courts apply when considering the merits of the case are different for injunctive orders and mandatory orders.

I will describe the three criteria the Courts apply to applications for interim mandatory orders.

1. Merits of the case

In Traynor, the motions judge described this criterion as the applicant "must demonstrate that it is more probable than not that he will achieve success at trial" and "it is well established that there is a higher standard to be met where interlocutory mandatory relief is sought and in particular, that the plaintiff must make out a greater likelihood of success." This criterion was not in issue in the appeal.

In Canadian Tire Corporation Ltd. v. Dufrat,⁷ Canadian Tire sought a mandatory injunction, pending the trial of the matter, requiring its dealer to transfer its assets to another dealer. The Court wrote:

Finally, it is axiomatic that prohibitive and mandatory injunctions are extraordinary forms of relief which should be granted sparingly. Mandatory interlocutory orders are very rare and the court should be far more reluctant to grant a mandatory interlocutory order than it would be to grant a prohibitive injunction.

... at the interlocutory stage, when the final result of the case cannot be known and the court has to do the best it can, I think that the case has to be unusually strong and clear before a mandatory injunction will be granted ...

2. Irreparable harm

In RJR-MacDonald, the Court wrote:

At this stage the only issue to be decided is whether a refusal to grant relief could so adversely affect the applicants' own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application.

"Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other.

Monetary loss and irreparable harm were considered in Chen v. Canada Trustco Mortgage Corp⁸ This was an application by an elderly mortgagor for an interlocutory injunction restraining the mortgagee from attorning rents on the mortgagor's property. Mrs. Chen argued that she would live in poverty and suffer irreparable harm in the two years it would take for the action to come to trial if she did not receive interim relief. The Court wrote:

If the harm is strictly monetary, then it can almost by definition be compensated for by monetary damages.

I consider it entirely possible that a monetary loss which would reduce a person to living in destitution or dependent on charity could result in irreparable harm. It does not require a large stretch of the imagination to appreciate that requiring a person to live in poverty for 2 years may result in a level of emotional harm that is not compensable in damages. ... Irreparable harm cannot be founded upon mere speculation.

The Court found no evidence of irreparable harm.

3. Balance of convenience

The third test as enunciated in RJR-MacDonald involves "a determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits."

Conclusion on applicable test:

The test the Courts apply on the merits of the case is similar to that expressed by the Arbitrator in Cripps. As well, the factors that the Courts have considered under the criteria of "irreparable harm" and "balance of convenience" are similar to factors arbitrators have considered under the criterion of "urgency."

As well, the Court decisions and my decision in Federow and Kingsway reflect an analysis suggested by Justice Sharpe in Injunctions and Specific Performance⁹ where he wrote:

The checklist of factors which the courts have developed-relative strength of case, irreparable harm and balance of convenience-shall not be employed as a series of independent hurdles. They should be seen in the nature of evidence relevant to the central issue of assessing the relative risk of harm to the parties from granting or withholding interlocutory relief.

I find the three-part test as applied by the Courts consistent with what some arbitrators have applied and I will apply the three-part test, as augmented by the comments of Justice Sharpe, to the facts of this case.

EVIDENCE AND ANALYSIS:

Merits of the case:

The first issue in determining whether a person is entitled to income replacement benefits is to determine what work they did at the time of the accident. On the evidence I received, I find it likely that Mr. Kulasekarampillai did physical labour. However, it is not clear how many hours he worked per week. He deposed that in the weeks prior to the motor vehicle accident he had worked for two employers; five weeks for S & R Moving and Delivery Service Limited as a mover doing residential moving and delivery of telecommunications equipment, and two weeks for TIPS Temporary Help Inc. as a general labourer. He deposed that he worked for S & R 40 to 50 hours per week and for TIPS 36 hours per week for each of the two weeks. This totals 76 to 86 hours per week of work. However, Dr. Kirwin, a physiatrist who assessed Mr. Kulasekarampillai on his behalf, thought that Mr. Kulasekarampillai worked 20 hours a week as a mover and 30 hours a week as a courier for a telecommunications company. Dr. Paitich, an orthopaedic specialist who examined Mr. Kulasekarampillai on behalf of the Insurer, thought Mr. Kulasekarampillai's work for S & R comprised 20 hours per week doing residential moving and 20 to 30 hours per week delivering telecommunications equipment. Neither Dr. Kirwin nor Dr. Paitich expressed any knowledge of the work with TIPS and the extensive number of hours Mr. Kulasekarampillai worked in the weeks before the accident.

Mr. Kulasekarampillai deposed that Dr. Paitich's failure to make any reference to his employment at TIPS might have been due to the fact that he attended without an interpreter. If I accept that Dr. Paitich did not fully understand Mr. Kulasekarampillai because of the need for interpretation, the question is raised whether any of the assessors clearly understood Mr. Kulasekarampillai. Dr. Kirwin did not make any reference to the employment with TIPS. I have in evidence records and reports from ten health care professionals who examined or assessed Mr. Kulasekarampillai. I could find no evidence that any of them used an interpreter. The only comment on Mr. Kulasekarampillai's ability to communicate in English was that of an occupational therapist who reported that Mr. Kulasekarampillai's "English was functional."

As well, the nature of Mr. Kulasekarampillai's employment was not clear. He deposed that he went through an 18 month period in which he worked intermittently before he "was finally able to find steady employment." If this allegation was accepted, it would support Mr. Kulasekarampillai's argument that he would not give up steady employment in exchange for the chance of receiving income replacement benefits. However, the physiotherapist at the DAC reported, that at the time of the accident, Mr. Kulasekarampillai was working through three to four agencies as a general labourer. He was assigned to jobs and the length of each contract varied between two to three days to several months. If this was accepted, it would support State Farm's argument that Mr. Kulasekarampillai's employment was intermittent and meagre and that because he qualified for the maximum benefit of $400 per week at the time of the accident, he chose to pursue the uncertainty of income replacement benefits rather than the uncertainty of intermittent employment. Mr. Kulasekarampillai's testimony on the issue was not helpful. He said that someone took him to work for six months; that he didn't go on full-time employment; that he was full time with TIPS; that in the 18 months before he obtained employment with S & R, he was off work for a week or two; that he made $8,000 odd in the 18 months before he obtained employment with S & R; that S & R was part time and that he was promised full-time employment with S & R after three months; and that he had a six-month contract at the time of the accident.

Mr. Wilson points to a Functional Capacity Evaluation Report by Atila Balaban as reliable objective evidence of Mr. Kulasekarampillai's disability. Among other things, Mr. Balaban found that in 9 out of 10 objective tests, Mr. Kulasekarampillai performed consistently. However, one week earlier, a chiropractor tested Mr. Kulasekarampillai at a medical/rehabilitation DAC for symptom magnification and found that Mr. Kulasekarampillai magnified his symptoms. His findings included a finding that Mr. Kulasekarampillai was "over-reactive to mild almost feather-like palpation" and "pain reported on sham testing."

Mr. Wilson argued that Dr. Paitich's opinion that Mr. Kulasekarampillai was not disabled was unreliable. The issue for determination is not whether the insurer had grounds to terminate benefits. The issue is whether the insured has made out his case. If it is determined that Mr. Kulasekarampillai is entitled to benefits, and Dr. Paitich's opinion was not reliable, such a finding may be relevant to the issue of whether State Farm unreasonably terminated benefits and is liable to a special award. The same applies for Mr. Wilson's argument that State Farm did not arrange a psychological assessment.

It is not clear how many hours a week Mr. Kulasekarampillai worked at the time of the accident and what his essential tasks were. It is not clear whether any of the assessors understood Mr. Kulasekarampillai. Mr. Kulasekarampillai's alleged impairment is largely due to pain. A determination of whether he suffers disabling pain will largely depend on whether an arbitrator believes him and the lay witnesses he calls to support his evidence. On the evidence I received, I cannot find that it is more probable than not that Mr. Kulasekarampillai will achieve success at the hearing on the issue of entitlement to income replacement benefits.

Similarly, Mr. Kulasekarampillai's allegation in his affidavit that he cannot perform certain housekeeping tasks is largely a matter of whether an arbitrator believes him and the housekeeper.

Again, I cannot find that it is more probable than not that he will achieve success at the hearing on the issue of entitlement to housekeeping expenses.

Irreparable harm:

Mr. Kulasekarampillai failed to establish that he will suffer irreparable harm pending the final determination of his claim for three reasons.

First, I received very little evidence that Mr. Kulasekarampillai will suffer irreparable harm pending the hearing of this matter.

Second, any harm that Mr. Kulasekarampillai might suffer is mostly financial. I heard no evidence that an award of benefits together with automatic interest of two per cent per month would not compensate him for any financial loss.

Third, I do not believe Mr. Kulasekarampillai's allegation that his financial circumstances are so urgent that they should be addressed by an interim order. Mr. Kulasekarampillai proceeded with his claim expeditiously to the pre-hearing stage. However, at the pre-hearing he agreed to a hearing date in July 2004, eight months in the future. He did not mention his urgent financial need at the pre-hearing. He raised it two weeks after the pre-hearing. I heard no explanation for the delay. Had he raised it at the pre-hearing, he would have had his choice of early hearing dates. At the opening of this motion, Mr. Wilson declined my offer of an earlier hearing date. In the summer of 2003, Arbitrator Blackman noted¹⁰ that at that time and in April 2003, the Commission had hearing dates available a few weeks hence. The same applied at the time of the pre-hearing in this matter and the same applies now. Mr. Wilson said that the earliest date he was available was in July 2004 and that Mr. Kulasekarampillai had the right to the counsel of his choice. I heard no evidence to explain why Mr. Kulasekarampillai's choice of counsel should prevail over his choice of an early hearing date to deal with an urgent claim.

I do not believe Mr. Kulasekarampillai's allegation that his financial needs are so urgent that he will suffer irreparable harm if he does not receive interim benefits.

Balance of convenience:

If I accept Mr. Kulasekarampillai's evidence that he made $8,000 in the 18 months before he found employment with S & R, then he lived on approximately $100 a week. He explained that he managed by sharing a room with a friend. If I deny interim benefits, he will continue to live a meagre existence. If I award interim benefits pending the final determination of this matter and another arbitrator finds that Mr. Kulasekarampillai was not entitled to benefits, State Farm will obtain an order for the repayment of benefits which it may not recover.

Conclusion:

Mr. Wilson argued that it is not appropriate to say that "if he lived in poverty before the accident, he can live in poverty after the accident." I recognize that many claimants undergo financial suffering following a motor vehicle accident. That is why I said in Coutu and Wawanesa Mutual Insurance Company¹¹ that they are entitled to as speedy a resolution of their claims as possible. Mr. Kulasekarampillai's hearing could have been completed by now if he had wanted a speedy hearing.

Further, if I made an interim order, Mr. Kulasekarampillai would receive the disputed benefits at least until the hearing and possibly up to the time the hearing arbitrator rendered a final decision. Since the test for income replacement benefits becomes more strict 104 weeks after the accident and since an insured is not entitled to housekeeping benefits beyond 104 weeks, Mr. Kulasekarampillai would have received most of the disputed benefits without ever having to prove his case.

The fact that the main objectives of insurance law is consumer protection does not change the fact that, where an insurer denies payment, a claimant must prove his case on a balance of probabilities. And, in my opinion, if he wants an interim order, he must satisfy a higher standard of proof as well as establish irreparable harm and that the balance of convenience is in his favour.

Having regard to the three criteria and the relative risk of harm to each party from granting or withholding interim relief, I find that Mr. Kulasekarampillai is not entitled to interim income replacement benefits or interim housekeeping benefits.

January 21, 2004

William J. Renahan Arbitrator

Neutral Citation: 2004 ONFSCDRS 12 FSCO A03-001063

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SIVAHARAN KULASEKARAMPILLAI Applicant

and

STATE FARM MUTUAL AUTOMOBILE 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:

1. The application for interim housekeeping benefits and interim income replacement benefits is dismissed.

January 21, 2004

William J. Renahan Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.
2. 2Ramalingam and State Farm Mutual Automobile Insurance Company (FSCO A02-001646, September 5, 2003).
3. 3Cripps and AXA Insurance (Canada) (OIC A-013360, August 8, 1997).
4. 4(FSCO A00-001032, October 20, 2000).
5. 52003 CanLII 40149 (ON SCDC), 65 O.R. (3d) 7 (S.C.J., Div. Ct., June 4, 2003).
6. 61994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.
7. 71993 CanLII 5592 (ON CTGD), 108 D.L.R. (4th) 363 (Ontario Court, General Division, December 7, 1993).
8. 8[1997] O.J. No. 2834 (Ontario Court of Justice, July 11, 1997).
9. 9(2nd ed.: 1992; Canada Law Book).
10. 10Thiruchelvan and AXA Insurance (Canada) (FSCO A03-000056, August 26, 2003).
11. 11(FSCO A01-001446, June 21, 2002).