Neutral Citation: 2004 ONFSCDRS 74

FSCO A03-000473

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VASILIKI ZERIS

Applicant

and

AVIVA CANADA INC.

Insurer

DECISION ON A PRE-HEARING MOTION

Before:

David Muir

Heard:

April 19, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Jeffrey Raphael for Ms. Zeris

Frank Benedetto for Aviva Canada Inc.

Issues:

The Applicant, Vasiliki Zeris, was injured in a motor vehicle accident on May 23, 2001. She applied for and received statutory accident benefits from Aviva Canada Inc. ("Aviva"), payable under the Schedule.¹

The parties were unable to resolve their disputes through mediation, and Ms. Zeris applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Aviva seeks a stay of the arbitration until Ms. Zeris attends a number of assessments required by the Insurer. A hearing of Aviva's motion was heard on April 19, 2004 with the following result sent to the parties by letter that day:

This matter is scheduled to go to hearing beginning on May 31, 2004. Aviva Canada Inc. (Aviva) has brought a motion seeking a stay of the arbitration until Ms. Zeris attends three assessments scheduled with an orthopaedic surgeon, a neurologist and a psychiatrist, requested pursuant to section 42 of the Schedule. Ms. Zeris has refused to attend.

An affidavit made by a member of the law firm representing Aviva was filed. Written submissions in response were filed by Ms. Zeris. Oral submissions were heard on April 19, 2004 by teleconference arranged by the Commission. At the conclusion of the hearing I indicated to the parties that I would respond as quickly as I could, likely with a "bottom line" letter decision followed by more fulsome written reasons.

On the basis of the submissions received, I have concluded that the requested authorizations are not authorized by section 42 of the Schedule.

There are several difficulties with these requests that I will canvass in my written reasons, however the most profound problem flows from the timing of the requested assessment as they relate to the issues in dispute in the arbitration.

The original request for these assessments was made a little more than two months prior to the arbitration hearing. In light of their apparent scope, there is no reason why these assessments could not have been requested and scheduled weeks or months previously, avoiding the potential and actual prejudice to Ms. Zeris in their being undertaken now. For some of them at least, if the requests had been made in a more timely fashion there would likely have been no basis for Ms. Zeris' refusal to attend.

As indicated at the April 19th hearing, the issues in this motion are:

1. Are any or all of the orthopaedic, neurological or psychological assessments requested by Aviva authorized by section 42 of the Schedule?

2. If the answer to question 1 is yes, in respect of any of the assessments, is a stay of the arbitration justified should Ms. Zeris refuse to attend such an examination?

Result:

1. None of the requested assessments are authorized by section 42 of the Schedule.

EVIDENCE AND ANALYSIS:

Aviva is seeking to have Ms. Zeris assessed by Dr. Zarnett, an orthopaedic specialist; Dr. Moddel, a neurologist; and, Dr. Walsh, a psychiatrist. These assessments were requested for the first time on March 9, 2004 and were then scheduled to take place between March 24 and 29, 2004. Ms. Zeris has refused to attend these assessments. Aviva has brought this motion seeking a stay of the arbitration until Ms. Zeris attends.

The notice to Ms. Zeris, dated March 9, 2004, was addressed to her counsel. It provides in part as follows:

Please be advised that the following insurer examinations have been scheduled for your client, Vassiliki Zeris, with following members of health professions pursuant to Section 42 of the Statutory Accident Benefits Schedule.

Dr. Zarnett, Orthopaedic

Dr. Moddel, Neurologist

Dr. Walsh, Psychiatrist

The Benefits

The benefits to which these examinations relate are as follows:

1. Is Ms. Zeris entitled to receive a weekly income replacement benefit pursuant to Section 4 of the Schedule? Ms. Zeris was paid a benefit to March 6, 2003 less collateral benefits. She seeks benefits to date and ongoing.

2. Is Ms. Zeris entitled to receive a medical benefit for treatments provided by Chiropractic Wellness Centre and Dr. Young claimed pursuant to Section 14 of the Schedule?

3. Is Ms. Zeris entitled to attendant care benefits to May 23, 2003, pursuant to Section 16 of the Schedule?

4. Is Ms. Zeris entitled to payments for housekeeping and home maintenance services to May 23, 2003, pursuant to Section 22 of the Schedule?

The notice is signed by counsel for Aviva.

The material provisions of section 42 of the Schedule are set out below:

The Schedule does not authorize so called defence medicals. It does, on the other hand, authorize assessments at the request of the insurer, for the purposes of determining whether an insured person is entitled to a benefit. In addition to this right, arbitrators have interpreted the provision as including an authority to ensure fairness between the parties, typically in the context of an impending arbitration hearing.²

The onus is on the insurer to establish that the requested assessments are authorized by the Schedule³; although where no assessments have been conducted, that onus will usually be easily met, unless the timing of the request raises questions about the true purposes of the assessments.

Aviva relied upon the affidavit of Sean A. Brown, a lawyer from the law firm representing Aviva in this arbitration. No other evidence was tendered by the parties.

The background facts in this case are straightforward. Ms. Zeris was injured in an automobile accident on or about May 23, 2001. Disputes developed between the parties and several issues were referred to mediation but were not resolved there.

A pre-hearing discussion was held on August 28, 2003. At that time, the parties agreed that the arbitration would begin on May 31, 2004 for 4 days. The issues in dispute at the hearing were identified, agree to, and set out in the pre-hearing letter as follows:

1. Is Ms. Zeris entitled to receive a weekly income replacement benefit pursuant to section 4 of the Schedule? Ms. Zeris was paid a benefit to March 6, 2003 less collateral benefits. She seeks benefits to date and ongoing.

2. What is the amount of weekly income replacement benefit that Ms. Zeris is entitled to receive pursuant to section 6 of the Schedule? Aviva paid a benefit to March 2003 less collateral benefits. The parties will clarify the quantum issues prior to the arbitration hearing.

3. Is Ms. Zeris entitled to receive a medical benefit for treatments provided by Chiropractic Wellness Centre and Dr. Young claimed pursuant to section 14 of the Schedule?

4. Is Ms. Zeris entitled to attendant care benefits to May 23, 2003, pursuant to section 16 of the Schedule?

5. Is Ms. Zeris entitled to payments for housekeeping and home maintenance services to May 23, 2003, pursuant to section 22 of the Schedule?

6. Is Ms. Zeris entitled to payments for the cost of examinations performed by Dr. Ogilvie-Harris; Dr. Kaminska; and Dr. Young, pursuant to section 24 of the Schedule?

In addition Ms. Zeris is seeking a special award and interest. Both parties are seeking to have their arbitration expenses paid by the other.

Ms. Zeris has been assessed on several occasions.

At the request of Aviva, Independent Rehabilitation Services assessed Ms. Zeris' ability to perform her domestic duties and other activities of daily living. Reports were filed from June 7, 2001 to May 17, 2002 respecting Ms. Zeris' attendant care needs, work site analyses and progress reports.

Aviva had Ms. Zeris assessed by Dr. G. Moddel, a neurologist, in October 2001. Dr. Moddel noted that Ms. Zeris had difficulties with positional vertigo. Dr. P. Grant, an orthopaedic surgeon, assessed Ms. Zeris in October 2001 and then again in May 2002. Dr. Grant concluded that Ms. Zeris was not physically unable to perform her pre-accident employment duties. On the basis of Dr. Grant's opinions, Aviva terminated income replacement benefits effective May 30, 2002.

Ms. Zeris requested a disability DAC which was held in September 2002. Dr. B.K. Makos, a chiropractor, concluded that Ms. Zeris was not physically unable to perform the essential tasks of her pre-accident employment. Dr. N.E. Morris concluded, as well, that Ms. Zeris was not psychologically unable to perform her pre-accident work.

Dr. D.J. Ogilvie-Harris, an orthopaedic surgeon, prepared a report in May 2002 at the request of Ms. Zeris. He concluded that Ms. Zeris was incapable of returning to her pre-accident job duties. Ms. Zeris had a neuropsychological assessment performed by Dr. Alina Kaminska in July 2002 who concluded that Ms. Zeris had sustained an injury which significantly interfered with her ability to work.

Dr. Gerald Young, a psychologist, saw Ms. Zeris in September 2002. In a psychological assessment and treatment plan, Dr. Young opined that Ms. Zeris suffered from several psychological diagnoses and she would be quite limited in her ability to work. He recommended a three-month course of psychotherapy on a weekly basis followed by a further course of therapy over 18 months.

The next assessment noted in the material was a follow-up opinion from Dr. Ogilvie-Harris, who specifically addressed the post two-year test for entitlement to income replacement benefits. This report, dated September 8, 2003, was provided to counsel for Aviva on September 12, 2003.

In October 2003, a follow-up report from Dr. Young, dated September 29, 2003, was provided to Aviva via its counsel

In February 14, 2004, Aviva received via its counsel a number of documents provided to it pursuant to undertakings made at the pre-hearing discussion. Included in this material were documents from Ms. Zeris' Canada Pension Plan Disability Pension file; updated records of Dr. P. Solomon, a neurologist; the notes and records of a Dr. Liang; as well as a report from Dr. J. Mitsopulos, a treating psychologist for Ms. Zeris.

The report of Dr. Mitsopulos was made in the context of Ms. Zeris' collateral long-term disability (LTD) benefits claims. It is not clear when Ms. Zeris would have been made aware of its existence. In her report, the doctor largely endorses Dr. Young's diagnoses and recommends psychological treatment for Ms. Zeris.

There are a number of difficulties with the requests of Aviva. Firstly, section 42 requires that the assessments be for the purpose of determining an applicant's entitlement to a benefit under the Schedule. In the absence of any direct evidence from Aviva concerning the purpose of these assessments, I am asked to infer from the surrounding circumstances that this is their purpose. I note that the affidavit is not from Aviva, but from counsel and, as such, cannot (nor does it purport to) disclose much of the rationale for these assessments.

Determining the reason for Aviva's request is not helped by the wording of the notice itself. As noted earlier, the Insurer is required to advise the Applicant of the reasons for the assessments. The notice on its face suggests that the assessments each relate to all of the benefits listed. How this can be, when two of the benefits claimed are not in dispute beyond the two-year mark which passed almost a year prior to the requested assessments, is not answered by the material provided by Aviva.

Aviva submits that these assessments are required primarily in order to assess Ms. Zeris' entitlement to income replacement benefits beyond the 104-week mark.⁴ This would, it seems to me, be an appropriate basis for an insurer seeking a section 42 assessment, even where it had in fact terminated benefits before the 104-week mark. However, in this case Aviva waited many months beyond the time where this issue had crystallized before making these requests. If it was not clear before, it was evident at the pre-hearing in August that the claim was being pursued beyond 104 weeks. That Ms. Zeris was pursuing this benefit would have been reinforced by Aviva's receipt of Dr. Young's and Dr. Ogilvie-Harris' update reports in October 2003, both of which speak to Ms. Zeris' ability to work, more or less directly, addressing the post 104-week standard for entitlement.

In response to the claim for benefits beyond 104 weeks, Aviva appears to have done nothing until March 9, 2004 when counsel gave notice to Ms. Zeris that it required further assessments of her. In the absence of any evidence from Aviva about its motivation, it is difficult to be certain about what prompted it to act in March 2004. However, the inference is clear that Aviva became concerned that it had no expert reports in response to Ms. Zeris' expert opinions on the post 104-week test and sought to buttress its arbitration case with these assessments. This is not a purpose authorized by section 42 and has often been the basis for arbitrators declining to support an insurer's request for assessments in anticipation of an arbitration hearing.⁵

In considering the need to ensure fairness between the parties - the second basis for an insurer being entitled to an assessment - that analysis supports Ms. Zeris' view that these assessments are not reasonable and her refusal to attend. Again, it is the timing of these requests that causes the difficulty. This is not a case where an applicant has only disclosed at the last minute an expert opinion on some material issue in dispute. The concern of Aviva is said to be Ms. Zeris' entitlement to income replacement benefits, however, as discussed above, these requests are being made almost a year after this issue had crystallized and a little more than six months after Ms. Zeris had made it clear that she was seeking this benefit.

Although once Aviva, or its counsel, determined that it required these assessments, it acted with reasonable dispatch, but the fact remains that these assessments were at their earliest, arranged to occur about 60 days before the arbitration hearing. In the absence of any extenuating circumstance, such as new theory of disability arising, and considering the length of time since the income replacement benefit issue had crystallized, it was simply too late to make these requests. The prejudice to Ms. Zeris in having to respond to reports which would only be available shortly before the arbitration hearing, when those reports could have been asked for many months prior, tilts the balance decidedly against the reasonableness of the requested assessments.

Accordingly, I find that these assessments are not authorized by the Schedule and are being sought, not to determine Ms. Zeris' entitlement to income replacement benefits, but to buttress Aviva's case in the upcoming arbitration. In balancing the interests of the parties as well as the relative prejudice in granting Aviva's motion, fairness requires that the motion be dismissed.

EXPENSES:

The issue of expenses was not addressed by the parties. It can be raised before the hearing arbitrator at the conclusion of the hearing.

May 17, 2004

David Muir

Arbitrator

Date

Neutral Citation: 2004 ONFSCDRS 74

FSCO A03-000473

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VASILIKI ZERIS

Applicant

and

AVIVA CANADA INC.

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 assessments requested by Aviva are not authorized by section 42 of the Schedule. Accordingly Aviva's motion for a stay is dismissed.

2. The parties' expenses of this motion may be considered by the hearing arbitrator.

May 17, 2004

David Muir

Arbitrator

Date

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. 2See Belair Insurance Company Inc. and F.S., (OIC P96-00039, June 11, 1996)
3. 3See for example Manolakas v. Royal Insurance [1998] O.J. No. 2157, confirmed by the Court of Appeal [1999] O.J. No. 3356; Singh and Kingsway General Insurance Company, (FSCO A02-001290, November 5, 2003)
4. 4Section 5(2)(b) of the Schedule. After 104 weeks of disability the test for entitlement to income replacement benefits, amongst others, changes in a substantial way.
5. 5See Belair, supra; Sidhu and Security National Co./Monnex Insurance Mgmt. Inc., (FSCO A02-000763, June 11, 2003) amongst many others.