Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 159

Appeal P04-00004

OFFICE OF THE DIRECTOR OF ARBITRATIONS

TTC INSURANCE COMPANY LIMITED Appellant

and

DEBORAH WOOTTON Respondent

Before: David R. Draper

Representatives: Norma Priday for TTC Thomas Wolf Zwiebel for Mrs. Wootton

Hearing Date: August 19, 2004

APPEAL ORDER

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

The appeal is allowed, and the arbitration order, dated January 15, 2004, is rescinded.
The matter is referred back to arbitration for a hearing before a different arbitrator.
If the parties are unable to agree on appeal expenses, the matter may be resolved in accordance with Rule 79 of the Dispute Resolution Practice Code.

November 2, 2004

David R. Draper Director of Arbitrations

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

In a decision dated January 15, 2004, the Arbitrator concluded that Ms. Wootton was injured in an “accident,” as defined in s. 2 of the SABS-1996.¹ The TTC Insurance Company Limited (“TTC”) appeals, claiming he erred in law in reversing the onus of proof and misapprehending critical evidence. For reasons that follow, the appeal is allowed.

II. BACKGROUND

Ms. Wootton contacted the TTC on January 24, 2001 about an incident she said took place approximately seven weeks earlier – on December 7, 2000. Shortly thereafter, she provided a written statement that is set out below:

On December 11/2000 I was on my way to work.² I took the 124 Lawrence bus to Sunnybrooke Hospital. I had a transfer but I have since lost it. I was travelling alone. It was between 8:15 and 8:30 a.m. when I exited the 124 bus. I was going to get on the #11 Davisville Bus which pulled in front. I did not get either bus number. I do recall the driver of the 124 was a white male. I think he had dark hair and glasses. He was possibly in his mid to late 40’s. I went to enter the #11 at the front door. A group of people got on before me. I was the last to try and board the bus. I reached up with my left arm. The door closed. I went to bang on the door. There was no one on the steps. The bus pulled away. I lost my balance and fell. I fell on my left side and face. I could hear people yell. The bus had travelled only a foot or so. He stopped the bus, opened the door and got off the bus. The driver was a male white about 5’8” - 5’9” tall. He was in his late 40’s to early 50’s. I think he was clean-shaven. I can’t recall if he wore glasses but I don’t think so. He was average build. The driver stood on the step. I tried to push myself up with my left arm. I could not. I used my right arm to get up as the driver stood on the step and watched. My left arm was now “hanging down.” After I was up he got off the bus. He asked if he could help me and if I was okay. I said I did not know. The driver told me I should go to Emergency. I asked for his help. He led me to emergency and found me a seat. He spoke briefly to the receptionist and left. I was told in emergency my shoulder was separated. I had x-rays. There are two fractures. I have been in a sling. I am now in physiotherapy. I have not been able to work since the accident. My mother has come from Sudbury to help me. I have a housekeeper coming in once a week. I did not have a housekeeper before the accident.

Sunnybrook records confirm that Ms. Wootton was seen as a walk-in patient in the Emergency Department on December 7, 2000. The records include a notation that she “fell running to bus.” X-rays taken that day revealed that she suffered “a significant impacted four-part fracture of the proximal humerus,” requiring immobilization and a referral for physiotherapy.

The TTC investigated Ms. Wootton’s claim. While it accepted that she fell in the area of the bus loop in front of Sunnybrook, the question was whether she was injured in an “accident,” as defined in the SABS-1996. Using the words of the legislation, was her impairment directly caused by the use or operation of an automobile? The TTC was not convinced that the incident happened as Ms. Wootton described it and, as a result, rejected her claim for accident benefits.

Some time later, apparently in the summer of 2002, Ms. Wootton applied for mediation. When the dispute was not resolved, she applied for arbitration. At the pre-hearing in May 2003, the parties identified the issues in dispute. Ms. Wootton claimed entitlement to various accident benefits, including income replacement benefits from one week after the incident and ongoing, medical and rehabilitation benefits, attendant care benefits, interest and arbitration expenses. The TTC maintained its position that no benefits were payable because there was no “accident.”

According to the pre-hearing letter, the parties “agreed that the hearing should be bifurcated,” with the accident issue to be heard as a “preliminary issue.” Dates were set for both the preliminary hearing and the main hearing, with the latter to proceed “should there be a finding that the Applicant [Ms. Wootton] did suffer an impairment as a result of an accident as defined in the Schedule [SABS-1996].”

The Arbitrator released his “Decision on a Preliminary Issue” on January 15, 2004. In describing the issue before him, he stated: “The parties also agreed, procedurally, that the first portion of this bifurcated hearing would be treated as preliminary issue hearing, with the Insurer having the onus of proof that Ms. Wootton was not involved in an accident as defined in the Schedule [SABS-1996].” Later in the decision, he came back to the question of onus, as follows:

Although Ms. Wootton has the overall burden of proving her claim, in this matter, the TTC has accepted, and its counsel confirmed at the hearing that it has the burden of proving that Ms. Wootton was not injured in a motor vehicle accident, as defined by the Schedule [SABS-1996].

Even if the TTC had not expressly conceded this point, I would accept that the “tactical burden” on this issue had shifted to the TTC. [p. 11]

The Arbitrator found Ms. Wootton to be a credible witness, whose testimony “mirrored the general outline of events recorded in her earlier statement to the TTC.” Where she diverged from her written statement, he accepted that the pain and shock of the fall “may well have clouded [her] perception and recollection of the events of that morning,” and that the accuracy of her written statement may have been affected by the medication she was taking. Evaluating Ms. Wootton’s testimony on cross-examination, the Arbitrator found it “clear that many of her observations contained in the February 2001 statement were based on her attempt to reconstruct the incident retrospectively.” Ultimately, he stated: “While some of the precise details of the period immediately following the accident may remain murky and subject to revision, I find Ms. Wootton’s recall of the incidents leading up to the accident to be both plausible and credible.”

Based on his factual findings, the Arbitrator concluded that Ms. Wootton was injured in an accident:

I find, therefore, that an injury incurred as part of the direct transfer between two buses forms part of the bus trip and a disability arising from such an injury arises directly from the normal use or operation of a motor vehicle (the buses).

Even if it were to be found that the disembarkation from the first bus somehow broke the chain of causation, I find that Ms. Wootton’s evidence that she was actively attempting to board the second bus and, indeed, was touching the bus³ as she fell, demonstrates a close enough connection to the TTC bus to trigger an accident benefit claim. [pp. 14-15]

The TTC appealed. Although the appeal was from a preliminary order, Ms. Wootton agreed that it should proceed before the arbitration hearing on the substantive issues.

III. ANALYSIS

As noted above, the TTC claims the Arbitrator erred in law in reversing the onus of proof and misapprehending critical evidence.

A. Onus

The Ontario Court of Appeal discussed the burden of proof in insurance claims in Shakur v. Pilot Insurance Co. (1990), 1990 CanLII 6671 (ON CA), 73 D.L.R. (4th) 337, 74 O.R. (2d) 673 (C.A.). In that case, the plaintiff made a claim under a tenant’s insurance policy that protected her against “theft.” The basis of her claim was that after removing her jewellery from a bank deposit box, she was assaulted on her way home and the jewellery was stolen. The insurer denied there was any such robbery. The trial judge held that the insurer’s position amounted to an allegation of fraud and, therefore, a “higher degree of probability” was required. The Court of Appeal held that the trial judge erred in placing the burden of proof on the insurer, stating as follows:

It is fundamental insurance law that the burden of proof rests on the insured to establish a right to recover under the terms of the policy. In this case, the burden rested on the [insured] and remained on the [insured] to prove on the balance of probabilities that a theft of her jewellery had occurred. That the [insurer], in denying the allegation of theft, impliedly alleged that the [insured] was fraudulent in putting forward the claim in no way shifted the basic burden of proof resting on the [insured].

. . . The issue was not whether the [insurer] had proven a fraud on the part of the [insured]. The simple issue was whether the [insured] had established a theft within the meaning of the policy.

This is the law in Ontario. On a claim for payment under an insurance policy, the claimant has the burden of proving that he or she fits within the scope of coverage. The situation does not change simply because the insurer challenges the facts upon which the claim is based. The law is not, as Ms. Wootton suggests, that she met her obligation by completing the application form and providing a written statement about the incident, thereby shifting the burden to the TTC to prove there was no accident.

The burden of proof in accident benefits cases was discussed at some length by Director’s Delegate Makepeace in El-Saikali and Co-Operators General Insurance Company, (FSCO P01-00059, March 13, 2003). I agree with her analysis, including her approval of the following excerpt from an earlier appeal decision:

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.⁴

There is some question in this case about which burden or onus is being discussed at different parts of the decision. I am inclined to agree with Ms. Wootton that the Arbitrator’s initial statement that the TTC accepted the onus is explained by his later discussion of the shifting tactical burden. In other words, the Arbitrator accepted that Ms. Wootton had the overall burden of proving her claim, or the basic burden of proof, but held the tactical burden of proof had shifted to the TTC.

It is not clear to me, however, what shifted the tactical burden. This was not a case where the TTC accepted that Ms. Wootton had brought herself within the scope of coverage, but was relying on some type of exclusion that it could be expected to prove. The dispute was about coverage, which turned on a straightforward factual question – what happened outside of Sunnybrook Hospital on December 7, 2000? The TTC could not be expected to prove what did not happen on that date. It was up to Ms. Wootton to bring forward credible evidence in support of her claim.

The one unusual feature in this case is the parties’ agreement to bifurcate the hearing. I find it difficult to understand, however, why this would have affected the burden of proof. Bifurcating the hearing did not change the question to be answered. Rather than fundamentally affecting the obligations of the parties, it was a pragmatic and sensible way to streamline the hearing process – if Ms. Wootton could not prove that she was injured in an accident, there would be no need to decide the extent of her disabilities or her entitlement to specific benefits.

The TTC referred me to an earlier decision by the same Arbitrator – Ofori and Allstate Insurance Company of Canada, (FSCO A03-000027, November 20, 2003) – which may help explain his approach. In Ofori, the insurer rejected the insured person’s claim on the basis that it was fraudulent. It claimed the accident was planned and that evidence of a “collision” had been created by hitting the vehicle with a rectangular object. At page 5, the Arbitrator correctly states that “[g]enerally, in any insurance claim, the onus is on an insured person to demonstrate that a claim comes within the parameters of an insurance policy, and that the claim meets any pre-condition set by the policy for the payment of a claim by an insurer.” Later in the decision, he says that the onus may shift “if the issue of whether or not an accident took place was heard as a true preliminary issue, with the onus clearly on the Insurer.” In support of this proposition, he notes that the “onus is always on a person who asserts a proposition that is not self-evident,” citing Robins v. National Trust, 1927 CanLII 469 (UK JCPC), [1927] A.C. 515 [Privy Council].

I agree with the TTC that Robins does not stand for the proposition that the onus is always on the party raising a preliminary issue. It simply deals with a party’s obligation to prove the facts upon which it intends to rely. A more complete excerpt is set out below:

Onus is always on a person who asserts a proposition that is not self-evident. To assert that a man who is alive was born requires no proof. The onus is not on the person making the assertion, because it is self-evident that he had been born. But to assert that he was born on a certain date, if the date is material, requires proof; the onus is on the person making the assertion.

In this case, Ms. Wootton was asserting that she suffered an impairment that was directly caused by the use or operation of a TTC bus. That is not a self-evident proposition and, therefore, applying the analysis in Robins, it was up to her to provide the necessary proof.

The situation is complicated by the fact that the Arbitrator states in his decision that the TTC agreed it had the burden of proving there was no accident. The TTC says there was no such agreement, and offered to provide affidavits from the lawyer and its representative present at the arbitration hearing. The TTC acknowledges that it agreed to go first, presenting the evidence it obtained through its investigations, but claims this was done to facilitate the hearing process, not as a concession that it bore the burden of proving a negative – that there was no accident.

In her written submissions, Ms. Wootton stops short of saying that the TTC agreed it had the burden of proving she was not involved in an accident. She states that “the TTC did not object and acquiesced that they had the burden of proof. They requested a bifurcation of the arbitration to deal with the factual issue of whether an accident occurred. They agreed to present their case first. They never objected nor made a motion to suggest otherwise to the arbitrator.” In oral submissions, she clarified her position that it was the tactical or evidentiary burden that the TTC took on, not the ultimate or basic burden of proof.

Based on the evidence and submissions before me, I find that the parties and the Arbitrator lacked a common understanding of the nature of the preliminary hearing and the resulting burden of proof. Unfortunately, this fundamentally undermined the fairness of the process.

B. FACTUAL FINDINGS

I also conclude that the Arbitrator failed to make the factual findings necessary to decide the issue before him. In part, this is explained by the misplaced burden of proof. Instead of making clear findings on what happened, the Arbitrator focussed on whether the TTC had established that “Ms. Wootton merely had an unfortunate ‘slip and fall’ while walking on the sidewalk at Sunnybrook.” I agree with the TTC that, as a result, he did not give Ms. Wootton’s testimony the scrutiny it required.

Reading the decision, I am struck by the degree to which the Arbitrator looked to the TTC to disprove Ms. Wootton’s version of the incident, even as her version changed at the hearing. The clearest example is his criticism of its failure to provide information about the #124 bus and its drivers. Given the specificity of Ms. Wootton’s written statement, it is not surprising that any investigation would focus on the #11 bus. In addition, there is no suggestion that the TTC failed to produce any records that Ms. Wootton requested as relevant to her claim. It was not until her cross-examination, which took place after the TTC had already presented its evidence, that there the arbitration decision, Ms. Wootton suggested in cross-examination that she might have been assisted by a “good Samaritan” wearing a TTC uniform. It is difficult to understand how this uncertainty could have negatively affected the TTC’s position unless it had to meet a rather heavy burden of proof.⁵

Credibility was at the core of this dispute. Ms. Wootton claimed to have been injured in an accident, but did not bring any independent evidence to corroborate the details of her account. While this did not prevent her from proving her claim, her credibility was crucial. In my view, it was not enough for the Arbitrator to find possible explanations for the frailties in her evidence – the pain and shock of the incident and pain medication – and then make a general assessment that her testimony was “credible with regard to the details of the accident.” He had to explain why he was prepared to rely on her later version of events.

Finally, the Arbitrator’s failure to make specific factual findings also stems from his overly broad interpretation of the scope of “accident.” The current definition does not include any injury where the person has some connection to a TTC bus, or is in the process of using the transit system. It requires a direct causal connection between the “use or operation of an automobile,” which includes a TTC bus, and the impairment.

The details in this case were critical. If the incident happened as Ms. Wootton described it in her written statement, losing her balance as she went to bang on the door of a moving bus, she might well fit within the definition of “accident.” On this point, however, the Arbitrator was less than definitive. He found that: “[s]he was in proximity to both buses, and apparently touching the door of the second bus as it closed and the bus pulled away.” [p. 13] In my opinion, this finding is not sufficient to support a conclusion that Ms. Wootton was involved in an “accident,” as defined in the SABS-1996.

C. Outcome

The TTC submits that I have sufficient information to substitute my own decision. I do not agree. As indicated above, the factual details are critical. This requires a careful assessment of the evidence, including oral testimony. Therefore, I conclude that the matter must be reheard and, given the fundamental misunderstanding underlying the first hearing, it should be heard by a different arbitrator.

IV. APPEAL EXPENSES

Appeal expenses were not addressed at the hearing. The parties are encouraged to resolve the issue, but if they are unable to do so, the matter may be resolved in accordance with Rule 79 of the Dispute Resolution Practice Code.