Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 154

Appeal P05-00021

OFFICE OF THE DIRECTOR OF ARBITRATIONS

TTC INSURANCE COMPANY LIMITED

Appellant

and

STANISLAV KANAREITSEV

Respondent

Before:

Nancy Makepeace

Representatives:

Norma Priday for TTC

Henry Goldentuler for Mr. Kanareitsev

Hearing Date:

March 21, 2006

APPEAL ORDER

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

1. The appeal is allowed. The arbitrator's order dated July 7, 2005 is revoked. A new arbitration hearing shall be held.

2. If the parties are unable to agree on appeal expenses, a hearing may be requested in accordance with Rule 79 of the Dispute Resolution Practice Code.

September 18, 2006

Nancy Makepeace Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The TTC Insurance Company Limited ("the insurer") appeals the arbitrator's decision that Mr. Kanareitsev's accident-related impairments entitled him to various benefits under the SABS-1996.¹ Causation was the main issue at the arbitration hearing, with the insurer arguing that Mr. Kanareitsev's post-accident decline was due to the natural progression of pre-existing polyneuropathy. The arbitrator accepted Mr. Kanareitsev's claim that the accident materially contributed to his worsening functional status and therefore found he was entitled to non-earner benefits, medical benefits, attendant care benefits, and housekeeping and home maintenance services. Apart from the causation question, the insurer also took issue with the medical benefits claimed in relation to treatment provided by the Sports Medicine and Rehabilitation Clinic ("SMRC") and Accident Injury Assessment Centre ("AIAC") and the cost of examinations and reports by those two clinics. The arbitrator accepted all Mr. Kanareitsev's claims.

On appeal, the insurer takes issue with the arbitrator's conduct of the hearing, her treatment of the evidence, and her reasons for decision. Mr. Kanareitsev claims the insurer's dispute is with the arbitrator's factual conclusions, which are beyond the scope of appeal because s. 283(1) limits appeals to questions of law.

On September 18, 2006, I released my order in this appeal, along with a covering letter giving brief reasons on the main ground of appeal:

Briefly, I conclude that the arbitrator's reasons fail adequately to explain why she rejected the insurer's position, supported most strongly by Dr. Devlin, that Mr. Kanareitsev is impaired due to the progression of a pre-existing polyneuropathy and not because of the accident.

I understand that the arbitration hearing on catastrophic impairment has been adjourned pending release of the appeal decision, and more recently, Arbitrator Rogers adjourned Mr. Kanareitsev's motion to exclude evidence.² This matter will now be referred to arbitration for rehearing. As the causation dispute is fundamental to the parties' positions, the parties may wish to consider combining both proceedings in a new arbitration hearing.

These are my reasons for decision.

II. BACKGROUND

As the arbitration decision includes a comprehensive review of the evidence, I need only summarize the salient facts.

On July 12, 2001, Mr. Kanareitsev was riding his bicycle when he was struck by a streetcar. He was thrown into the air and fell on his right side, hitting his head. He was taken to the hospital by ambulance and discharged to the care of his pre-accident family doctor, Dr. Alex Donskoy. At the time of the accident, Mr. Kanareitsev was 69 years old and retired, though he and a number of lay witnesses testified that he was independent in his activities of daily living and lived a full life, including frequently riding his bicycle. There seems to be little dispute that as a result of the accident, he suffered a head injury, including brief loss of consciousness, as well as neck and back pain, injuries to his right shoulder, elbow, knee and thigh. Subsequent complaints have included chronic pain, anxiety and depression, memory and sleep problems, inability to concentrate, and other psychological impairments.

Mr. Kanareitsev claimed non-earner benefits ("NEBs"), which are payable under s. 12 of the SABS-1996 while the insured person is completely unable to carry on a normal life as a result of and within 104 weeks after the accident. The arbitrator accepted the claim:

I find that as Mr. Kanareitsev is wheelchair bound and completely disabled from almost all of his pre-accident daily activities, he suffers from a complete inability to carry on a normal life. A comparison of Mr. Kanareitsev's activities prior to the accident with those after the accident leads to this inescapable conclusion. Consequently, Mr. Kanareitsev is entitled to the payment of non-earner benefits from January 21, 2002 and ongoing.³

Mr. Kanareitsev also claimed medical benefits under s. 15 of the SABS-1996 and the cost of assessments and reports under s. 24. Dr. Donskoy referred him to SMRC, where he received physiotherapy and massage treatment from July 16, 2001 to November 1, 2002; a limited amount of acupuncture treatment was also provided in the fall of 2001. Dr. Marc Marciniak, the Medical Director of SMRC, referred Mr. Kanareitsev to AIAC, where he was seen by Dr. Bernard S. Grzyb, a psychologist, and received treatment from August 3, 2001 to November 3, 2002. The insurer paid the SMRC physiotherapy and massage claims until February 2002, but not the acupuncture claim, and paid the AIAC psychological treatment claims until March 2002. In terminating benefits, the insurer relied on a report by Dr. Michael Devlin, a physiatrist, who assessed Mr. Kanareitsev as part of a multidisciplinary med-rehab DAC assessment in February 2003. The assessors found the disputed treatment plans not to be reasonable and necessary.

Dr. Marciniak also referred Mr. Kanareitsev for an assessment by Sophie Bielawski, an occupational therapist. Based on her reports dated July 30, 2001 and April 30, 2002, Mr. Kanareitsev claimed attendant care benefits of $2,215.93 per month from April 9, 2002 to July 12, 2003 and housekeeping and home maintenance benefits of $100 per week from November 9, 2001 to July 12, 2003, as well as transportation assistance, a wheelchair and various medical and rehabilitation benefits.

The insurer arranged an attendant care DAC, which was conducted on March 19, 2003. The DAC included an in-home assessment for attendant care and goods and services by Ms. Kathryn Blaney, an occupational therapist. The arbitrator preferred the findings of Ms. Bielawski over those of Ms. Blaney:

Ms. Bielawski's findings are more consistent with the preponderance of the medical and lay evidence. Ms. Bielawski concluded that Mr. Kanareitsev suffered from a constellation of physical symptoms which made him incapable of carrying out his activities of daily living. As I have found that the 2001 accident was the cause of Mr. Kanareitsev's impairment, I also find that Mr. Kanareitsev is entitled to attendant care expenses and housekeeping as recommended by Ms. Bielawski in her occupational therapy report. He has incurred attendant care and housekeeping expenses which were reasonable and necessary as a result of the impairment suffered from the accident.⁴

The arbitrator also ordered payment of assessments, reports and treatment plans totalling some $15,000 under s. 24 of the SABS-1996, interest on overdue benefits under s. 46(2) of the SABS-1996, and a special award of $10,000 under s. 282(10) of the Insurance Act.

III. ANALYSIS

A. Introduction

In her written and oral submissions, counsel for the insurer organized her case around two threads: reasons for decision and reasonable apprehension of bias. I am not persuaded the conduct of the hearing would create a reasonable apprehension of bias in an informed observer. However, I conclude the matter must be re-heard because the reasons for decision do not adequately explain the arbitrator's rejection of the insurer's case. As there will be a new arbitration hearing, I will comment only on the main problems, to avoid any suggestion that I do or do not accept the insurer's position as to the ultimate outcome of the proceeding.

B. Reasons for Decision: The Standard

I would not want to suggest that a 54-page decision should have been longer. An adjudicator's reasons need not address every piece of evidence: "this would not be sensible or in keeping with the adjudicator's mandate to deal with disputes expeditiously."⁵ However, it is not enough for an adjudicator to describe the evidence put forward by the parties and then set out findings and conclusions. Reasons must explain the outcome and give the unsuccessful party a meaningful basis for considering whether to appeal, and they must allow for meaningful appellate review. In practical terms, that means adjudicators must pay special attention to "writing for the loser."⁶

C. The Arbitration Decision

The insurer does not challenge the principle, correctly stated by the arbitrator, that the accident need not be the sole cause of the insured person's impairments or disability, but need only make a material (or significant) contribution.⁷ The issue is whether the arbitrator gave sufficient reasons for concluding that the accident caused physical and psychological injuries which "materially contributed to the immediate disability and subsequent onset of chronic pain and deterioration of his polyneuropathy."⁸

The insurer relied on medical evidence documenting pre-existing problems. The arbitrator described the key evidence as follows:

In 1994, a car struck the handlebars of Mr. Kanareitsev's bicycle. Mr. Kanareitsev fell onto the car and then to the ground. He hit the left side of his head, his knees and his elbows. He lost consciousness. Mr. Kanareitsev needed assistance with most tasks following the 1994 accident and walked with a cane. As time passed, he required less and less help. His symptoms resolved and in the spring of 1997, Dr. Donskoy advised Mr. Kanareitsev that he had recovered from the accident. He had no dizziness, fewer headaches, less lower back pain and no problems with sitting.

Dr. Donskoy referred Mr. Kanareitsev for a neurological consultation with Dr. Birnbaum in April 1994 after he noticed the wasting of his upper extremities. The EMG studies completed in December 2, 1994 showed evidence of a chronic neurogenic process. A chronic neuropathy was diagnosed and a referral was made to Dr. Vera Bril, another neurologist, for a second opinion.

Dr. Bril observed in September 1995 that Mr. Kanareitsev was unable to get out of a chair without assistance and likely had "significant axonal neuropathy." Dr. Bril noted that Mr. Kanareitsev had a generalized weakness of all his extremities but had improved somewhat with exercise. Dr. Bril confirmed the diagnosis of axonal polyneuropathy which was asymptomatic and that "these [neck and dizziness] symptoms were attributed to a post-traumatic neurosis."⁹

The parties disagreed on whether Mr. Kanareitsev showed signs and symptoms of polyneuropathy before the 2001 accident. While Mr. Kanareitsev and his lay witnesses were consistent in depicting an active independent retired lifestyle before the accident, the medical evidence included many references to mobility and other problems. Other factual disputes concerned Mr. Kanareitsev’s recovery from the 1994 accident, the cause and sequelae of a slip and fall in January 2000 and a number of falls after the accident, and the timing of and reasons for his deterioration after the 2001 accident.

The arbitrator answered the causation question in this way:

The evidence before me was that Mr. Kanareitsev had recovered from his accident in 1994 with no impairment. I prefer the evidence of Dr. Donskoy, Dr. Alpert and the lay witnesses to that of Dr. Devlin. Due to his ongoing treatment of Mr. Kanareitsev, Dr. Donskoy was more familiar with his particular circumstances, including the chronic pain from which he suffered following the 2001 accident. I accept the evidence of Mr. Kanareitsev and his witnesses that, prior to the accident, Mr. Kanareitsev was a very healthy, fit 69 year old man who rode his bicycle frequently and participated in a full, satisfying social life while living independently.

I am not persuaded that if Mr. Kanareitsev were suffering from disabling symptoms from his polyneuropathy that he would have continued to lead such a vigorous, active life prior to the accident, including riding his bicycle.

While Mr. Kanareitsev had some prior accidents and medical problems, I find that the 2001 accident was the cause of his impairment, not any pre-existing condition. The testimony was fairly consistent that Mr. Kanareitsev was struck from behind by a streetcar while riding his bicycle. He sustained serious injuries which deteriorated and worsened over time so that he relied on a walker and a wheelchair for mobility. There was not only a change in his physical condition but also his psychological condition. Mr. Kanareitsev demonstrated by his evidence that the accident caused physical and psychological injuries. These injuries materially contributed to the immediate disability and subsequent onset of chronic pain and deterioration of his polyneuropathy. I find that the accident materially contributed to his impairment.¹⁰

The insurer's appeal focuses mainly on the arbitrator's treatment of the evidence of Dr. Devlin and Dr. Marciniak on the crucial question as to the role of the accident and the significance of the neuropathy in Mr. Kanareitsev's post-accident deterioration. It was Dr. Devlin's opinion that Mr. Kanareitsev had recovered from his accident-related injuries, and that his current impairments and disability were not accident related but were the result of the natural progression of his pre-existing polyneuropathy.¹¹ The arbitrator rejected Dr. Devlin's opinion, stating that she prefered to rely on the evidence of Dr. Donskoy, Dr. Alpert and the lay witnesses in finding that Mr. Kanareitsev suffers a complete inability to carry on a normal life as a result of the accident.¹²

She ordered a special award of $10,000 based on her finding that the insurer unreasonably delayed non-earner, attendant care, housekeeping and med-rehab benefits by placing "too great a reliance on the opinion of Dr. Devlin . . . in the face of the large number of medical reports which supported the position taken by Mr. Kanareitsev."¹³

It was Dr. Marciniak’s opinion that the accident was the main cause of Mr. Kanareitsev’s disability. Though the arbitrator did not discuss Dr. Marciniak in her reasons on NEB entitlement, her reasons for allowing medical benefits and the cost of assessments and reports strongly suggest she accepted Dr. Marciniak's evidence on causation. The insurer claims that the arbitrator's reasons failed to consider the strengths of Dr. Devlin’s evidence or the weaknesses of Dr. Marciniak's evidence. Mr. Kanareitsev submits that the arbitrator's conclusion was supported by the evidence of Drs. Donskoy, Alpert and Pruzanski, as well as Dr. Marciniak. This is not evident from the reasons, as the arbitrator does not discuss the relative merits of their opinions on causation.¹⁴

The insurer put a great deal of emphasis on Dr. Devlin as "the only expert" to testify at the arbitration hearing. I reject any suggestion that the arbitrator was obliged to accept Dr. Devlin’s opinion based solely on his expertise or his role as a DAC assessor.¹⁵ However, the arbitrator erred by failing to address the relative strengths and weaknesses of the medical evidence she heard, and by failing to address the key points in the dispute between Dr. Devlin and Mr. Kanareitsev’s doctors, especially Dr. Marciniak.

In describing Dr. Devlin's evidence, at pp. 18-19 and pp. 38-39 of the decision, the arbitrator suggested a number of problems with it, without explaining her reasoning process or clearly stating her conclusions about the value of his evidence. For example, she stated that Dr. Devlin "acknowledged that Mr. Kanareitsev was capable of riding a bicycle at the time of the accident," but did not reference his evidence,¹⁶ and that of Dr. Phillips-Gange,¹⁷ that Mr. Kanareitsev's pre-accident problems would have made cycling unsafe, a point that was vigorously pursued by the insurer. This was important because Mr. Kanareitsev's claim rested heavily on his argument, which was accepted by the arbitrator, that his regular cycling activity demonstrated his pre-accident fitness.

The insurer also challenges the impartiality and reliability of the lay witnesses who testified in support of Mr. Kanareitsev's claim, but I have no basis for second-guessing the arbitrator's acceptance of that evidence. However, the arbitrator accepted the insurer's submission that Mr. Kanareitsev had failed to disclose his previous (1994) cycling accident to a number of assessors, but accepted the opinion of Dr. Donskoy, his family doctor, that this was due to memory problems: "I base this on my observations of Mr. Kanareitsev in the course of his testimony. He appeared to be genuine and forthright, although suffering from memory difficulties."¹⁸ If the arbitrator accepted Mr. Kanareitsev's testimony based on his demeanour alone, this was an error.¹⁹ An honest witness may give evidence that is inaccurate and unreliable because of limited observation or understanding, for example, or memory problems.

In any event, the arbitrator was required to address the conflict between the lay and medical evidence. Though she referenced the neuropathy diagnosis by Drs. Birnbaum and Bril, the neurologists who saw Mr. Kanareitsev in 1994-1995, she was "not persuaded that if Mr. Kanareitsev were suffering from disabling symptoms from his polyneuropathy that he would have continued to lead such a vigorous, active life prior to the accident, including riding his bicycle."²⁰ This does not answer Dr. Devlin’s evidence, reported by the arbitrator, that polyneuropathy is progressive by nature, that Mr. Kanareitsev’s treatment providers had documented signs of neuropathy before the accident, including diffuse muscle wasting, absent reflexes, weakness, frequent falls and inability to get up from a chair, and that Dr. Devlin’s findings on physical examination (diffuse and symmetrical signs in all four limbs) were typical of polyneuropathy and not typical of localized traumatic peripheral nerve injury. In Dr. Devlin’s opinion, Mr. Kanareitsev’s accident-related musculoskeletal injuries had resolved, and in any event did not explain his problems with balance and falling.

Dr. Marciniak, the Medical Director of SMRC, testified about Mr. Kanareitsev’s diagnosis, his treatment at SMRC and AIAC, and the treatment plans and reports for which the insurer was invoiced. The arbitrator described his evidence at pp. 25-30 of her reasons, and she allowed Mr. Kanareitsev’s claims for the cost of treatment at the two clinics, as well as the clinics fees for assessments and reports. Though the insurer vigorously challenged Dr. Marciniak’s expertise with respect to neuropathy, his qualifications to interpret an MRI, his knowledge of Mr. Kanareitsev’s pre-accident condition, his findings on physical examination of Mr. Kanareitsev, and especially his impartiality, the arbitrator addressed none of these issues in her reasons. Nor did she address Dr. Marciniak’s evidence about the business relationship between SMRC and AIAC, the qualifications of certain treatment providers at the clinics, or the clinics record-keeping, reporting and billing practices, issues of direct relevance to the insurer's reasons for challenging the claims relating to these clinics.

On a key causation question, the arbitrator set out Dr. Marciniak's evidence without comment:

In Dr. Marciniak's opinion, damage or injury to the peripheral nerve can cause serious deterioration of the polyneuropathy within the limb. Peripheral nerves are located at the elbow, shoulder, knee area and outside the thigh area. The MRI results show objective trauma to Mr. Kanareitsev's spine. Dr. Marciniak was aware of Mr. Kanareitsev's pre-existing medical condition. His opinion was that the accident was the main cause for Mr. Kanareitsev's current disability.²¹

Whether Mr. Kanareitsev's pre-existing polyneuropathy might have been aggravated by his traumatic injuries in the accident was an important controversy between Dr. Marciniak and Dr. Devlin about which both were cross-examined at length. On cross-examination by Mr. Kanareitsev's counsel, Dr. Devlin distinguished between focal peripheral neuropathy, which can develop as a result of trauma, and the condition Mr. Kanareitsev suffers from, generalized peripheral neuropathy, which cannot, in his opinion.²²

Arbitrators have frequently commented that accident benefits are about impairment and disability, not diagnosis, and that medical-legal causation does not require scientific certainty. At the same time, causation is not proved just because the claimant’s condition deteriorated after the accident; the claimant must prove on a balance of probabilities that the accident played a material role in that decline. That can be a difficult question where, as in this case, the claimant suffered a progressive condition before the accident that appears to have progressed afterwards. Expert evidence is likely to be important in this kind of case. The arbitrator was entitled to accept or reject Dr. Devlin’s evidence, but she was not entitled to dismiss it only on the basis of Mr. Kanareitsev’s functional decline after the accident.²³ If, as appears from the decision, the arbitrator accepted Dr. Marciniak’s evidence on the cause of Mr. Kanareitsev’s impairments, she was required to explain why she accepted his evidence, despite the insurer’s submissions as to its weaknesses, and why she rejected Dr. Devlin’s evidence, on which the insurer strongly relied. The arbitrator’s failure to explain her reasoning on these key points were the most important gaps in the decision.

Finally, the arbitrator was critical of Dr. Devlin for not considering chronic pain, and found that "Mr. Kanareitsev’s chronic pain materially and significantly affects his current impairment and disability."²⁴ She preferred Dr. Donskoy’s evidence: "Due to his ongoing treatment of Mr. Kanareitsev, Dr. Donskoy was more familiar with his particular circumstances, including the chronic pain from which he suffered following the 2001 accident." She concluded that the physical and psychological injuries Mr. Kanareitsev suffered in the accident "materially contributed to the immediate disability and subsequent onset of chronic pain and deterioration of his polyneuropathy."²⁵

It was open to the arbitrator to conclude that Mr. Kanareitsev was entitled to benefits because of impairments due to accident-related pain. However, in criticizing Dr. Devlin for failing to consider chronic pain, the arbitrator was required to state clearly which expert opinion(s) she relied on, and why. For example, the arbitrator described at some length the evidence of Dr. John F. Thornton, a psychiatrist who prepared a medical-legal report at the request of Mr. Kanareitsev's counsel in October 2003 and diagnosed chronic pain disorder secondary to general medical condition.²⁶ The arbitrator's ultimate conclusion suggests she accepted his evidence, but the decision does not say why. On appeal, Mr. Kanareitsev's counsel submits that Dr. Alpert and Dr. Pruzanski also diagnosed chronic pain. However, it is not enough to rely on "the preponderance" of medical evidence without more. In this case, where the medical record, both before and after the accident, is replete with references to dizziness, muscle weakness and atrophy, numerous falls and problems with balance and gait, the arbitrator was required to consider the relative roles of pain and neuropathy in the impairments that gave rise to Mr. Kanareitsev's entitlement to benefits.

Because I conclude that the gaps in the arbitrator's reasoning on the underlying causation question require a new hearing of all the issues, I need not discuss the insurer's additional grounds of appeal relating to Mr. Kanareitsev's treatment at SMRC and AIAC, the fees claimed for treatment plans and reports prepared by the two clinics, or with respect to the special award.

D. Reports by Dr. Mayer and Dr. Rathbone

The parties' dispute about the relative expertise of Dr. Marciniak and Dr. Devlin played out in the context of reports from Dr. Jack Mayer, a neurosurgeon who examined Mr. Kanareitsev as part of a CAT DAC, and Dr. Michel P. Rathbone, a neurologist who prepared a medical-legal report at the request of Mr. Kanareitsev’s counsel. Neither report was admitted into evidence.

After the first four days of hearing (January 12-15, 2004), the arbitration hearing was scheduled to resume on June 21, 2004. On March 22, 2004, Dr. Mayer released his CAT DAC report. It was Dr. Mayer’s opinion that Mr. Kanareitsev sustained the following injuries as a result of the accident: a minor cranio-cerebral head injury with a brief period of unconsciousness, post-traumatic headache and dizziness, post-traumatic depression, myofascial neck strain, myofascial back strain, and a bruise to his left thigh. "However," Dr. Mayer stated, "Mr. Kanarareitsev has had a progressive neurologic condition confirmed in 1995 when it was determined that he had a polyneuropathy. The increase in symptomatology with this progressive neurologic disease is not accident related. "Again, in the concluding "Opinion" section of the report, Dr. Mayer stated that Mr. Kanareitsev "is seriously impaired from a progressive neurologic disease (polyneuropathy)" which "has not been affected by" the accident.

On May 26, 2004, the insurer gave notice that it intended to rely on Dr. Mayer’s report when the hearing resumed. On June 16, 2004, Mr. Goldentuler objected on Mr. Kanareitsev’s behalf, stating that catastrophic impairment was not an issue in the hearing. The insurer tendered Dr. Mayer’s report and proposed to call Dr. Mayer to testify when the hearing resumed. Mr. Kanareitsev objected, and the arbitrator refused to admit the report.²⁷ The evidence was finally completed, after twelve days, on June 30, 2004, and written submissions were completed in November 2004 (benefits) and March 2005 (special award).

In early November 2004, Mr. Kanareitsev filed an Application for Arbitration with respect to catastrophic impairment designation, and produced Dr. Rathbone’s report, dated February 6, 2004.²⁸ Dr. Rathbone concluded that the 2001 accident resulted in myofascial injuries to the cervical and lumbar spine with underlying spinal degenerative changes and exacerbating pre-existing injuries, facet joint injuries to right C4-5 and C5-6 and to the lumbar spine, mild traumatic head injury producing a cumulative effect, post-traumatic cervicogenic headaches with secondary migraines and a right less occipital neuralgia, right rotator cuff injury and myofascial shoulder injury, right knee pain and giving way without any determined local cause but possibly secondary to muscle weakness, chest pain not thought to be related to his coronary artery disease, and post-traumatic depression with associated cognitive and behavioural changes. Dr. Rathbone did not state an opinion on the catastrophic impairment issue.

Dr. Rathbone's report reflects his concern about the role of neuropathy in Mr. Kanareitsev's post-accident condition. In his concluding paragraph, under the heading, "Relationship of the accident to the progression of the clinical effects of the neuropathy," he stated:

Although Mr. Kanareitsev may well have had an underlying neuropathy prior to the accident, he also has demonstrated a marked loss of physical abilities immediately after the accident. Thus, although the accident would not have contributed to any underlying genetic or metabolic cause for his neuropathy, it appears to have reduced his ability to compensate for other neurological losses. In this way, it has caused a disability greater than . . . would have been seen had he not had an underlying neuropathy to begin with. In other words, although the accident did not increase neuropathy, its effects there were synergistic with that of the underlying neuropathy in producing disability.

On appeal, the insurer submits that the arbitrator erred in refusing to admit Dr. Mayer's evidence, which was relevant to the main issue in dispute – the insurer's claim that the natural progression of pre-existing polyneuropathy was the cause of Mr. Kanareitsev's problems, not the July 2001 accident. According to the insurer, the arbitrator's ruling was based on the claim by Mr. Kanareitsev’s counsel that he lacked a responding report, a claim the insurer says was false. The insurer claims Mr. Kanareitsev’s counsel failed to disclose Dr. Rathbone’s report in time for this hearing in order to secure a favourable ruling on the central question of causation before proceeding with the catastrophic impairment arbitration.

The failure of Mr. Kanareitsev’s counsel to produce Dr. Rathbone’s report was a contravention of the documentary production rules set out in the Commission’s Dispute Resolution Practice Code. I dealt with the issue in my October 13, 2005 letter to the parties concerning the insurer's stay motion:

Mr. Goldentuler submits that the report was not tendered during the hearing because of Rule 39.1 of the Code, which requires all documents to be served on the other party at least 30 days before the first day of the hearing. However, Rule 39.2 allows a party to seek leave for late service, "in extraordinary circumstances." In this case, because the report was released four months before the resumption of the hearing, the arbitrator might well have granted such a request. This would have been a matter for her discretion considering the hearing dynamics and the potential for added cost and delay. In any event, a party’s disclosure obligations are not restricted to documents on which it intends to rely. Rule 32.2 of the Dispute Resolution Practice Code is as follows:

Subject to the time lines under Rule 39, the parties have an ongoing responsibility to ensure the prompt and complete exchange of documents that are reasonably necessary to determine the issues being arbitrated, including updates to the information previously exchanged and any additional documents obtained.

There is no dispute Dr. Rathbone’s report is credible and relevant to the issues in dispute. Whether it would have affected the outcome of the arbitration will be an issue in the appeal, and it would be inappropriate and premature to attempt any assessment of its importance at this stage of the proceedings.²⁹

In a subsequent decision, dated January 31, 2006, I admitted the reports of Dr. Rathbone and Dr. Mayer as fresh evidence in the appeal, ruling that both would be considered to the extent they are relevant to a question of law. The parties discussed the two reports in their oral submissions at the appeal hearing. The insurer submits that Dr. Mayer's report is significant because it is consistent with Dr. Devlin's opinion that Mr. Kanareitsev's post-accident decline resulted from the progression of his pre-existing polyneuropathy, not his accident-related impairments. In the insurer's view, Dr. Rathbone's report is to the same effect. In contrast, the insurer argues, Mr. Kanareitsev presented no expert opinion from a neurologist to counter Dr. Devlin's opinion. Mr. Kanareitsev reads Dr. Rathbone's report differently, submitting that it supports his claim. He argues that the insurer chose its expert – Dr. Devlin – and therefore cannot complain it was prejudiced by the exclusion of Dr. Mayer's evidence.

As the first four days of the arbitration hearing were not transcribed, I am unable to ascertain the arbitrator's reasons for refusing to admit Dr. Mayer's report into evidence. In any event, I am not persuaded she erred in doing so. If her concern was control of the process, as Mr. Kanareitsev asserts, her ruling was well within her authority. If, as the insurer asserts, her concern was the absence of a responding report, the issue is not arbitrator error – her ruling was made months before Dr. Rathbone's report was produced – but the non-compliance of Mr. Kanareitsev's counsel with the Commission's document production rules.

The arbitration hearing on the catastrophic impairment issue was scheduled to start on August 29, 2006. The hearing was adjourned pending receipt of this decision, but the arbitrator went on to hear Mr. Kanareitsev's motion for "an order excluding TTC's evidence on the issue of whether [his] impairments resulted from his pre-existing condition of polyneuropathy, on the grounds of res judicata or issue estoppel." The motion was adjourned to a date to be fixed on receipt of my decision.³⁰

Rule 30 of the Dispute Resolution Practice Code authorizes the Commission to notify the parties of its intention to combine proceedings where it appears that the applications have an issue or question of law, fact or policy in common, or that combining proceedings will result in the most just, quickest and least expensive means of dealing with the applications. Because the causation issue is common to both applications and given the questions that have been raised about the evidentiary record, it may be appropriate to combine the re-hearing of the issues in dispute in this appeal with the catastrophic impairment hearing.

IV. EXPENSES

If the parties are unable to agree on appeal expenses, a hearing may be requested in accordance with Rule 79 of the Dispute Resolution Practice Code.

November 2, 2006

Nancy Makepeace Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Decision on a Motion, (FSCO A04-002373, September 12, 2006).
3. 3Arbitration decision, p. 24.
4. 4Arbitration decision, p. 45.
5. 5Lyons and Metropolitan Insurance, (OIC P-009824, December 16, 1996), at p. 5.
6. 6On sufficiency of reasons, see, for example: Re Pitts and Director of Family Benefits Branch of the Ministry of Community & Social Services (1985), 1985 CanLII 2053 (ON HCJ), 51 O.R. (2d) 302 (Div. Ct.), at p. 310, Dowlut v. Ontario (Commissioner of Social Services), [1985] O.J. No. 1103 (Div. Ct.), at p. 4, Lyons and Metropolitan Insurance, note 5 above, Maas and State Farm Mutual Automobile Insurance Company, (FSCO P96-00080, December 8, 1997), Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817 (S.C.C.) at p. 845, Gray v. Director of the Ontario Disability Support Program (2002), 2002 CanLII 7805 (ON CA), 59 O.R. (3^rd) 364 (Ont. C.A.), at p. 374, R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, para. 15-23, and Fisher v. Moir, [2005] O.J. No. 4479 (Ont. Div. Ct.).
7. 7Arbitration decision, p. 23.
8. 8Arbitration decision, p. 24.
9. 9Arbitration decision, pp. 6-7, footnotes omitted.
10. 10Arbitration decision, pp. 23-24.
11. 11Arbitration decision, p. 18.
12. 12Arbitration decision, p. 23.
13. 13Arbitration decision, p. 49.
14. 14Dr. Donskoy's evidence is described at pp. 19-21 of the arbitration decision, Dr. Alpert's at p. 22, and Dr. Pruzanski’s at p. 48.
15. 15See, for example, R.. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9, and Villers and Pilot Insurance Company, (FSCO P05-00010, January 30, 2006), at pp. 26-27.
16. 16Arbitration transcript, June 24, 2004, pp. 20-21.
17. 17Arbitration transcript, June 28, 2004, pp. 20-21.
18. 18Arbitration decision, p. 23.
19. 19For example, see Kasap and Allstate Insurance Company of Canada, (OIC P96-00071, March 13, 1998), p. 6 and Sorokin and Wawanesa Mutual Insurance Company, (FSCO P04-00008, August 9, 2005), para. 76.
20. 20Arbitration decision, pp. 23-24.
21. 21Arbitration decision, p. 31.
22. 22Arbitration transcript, June 24, 2004, pp. 186-194.
23. 23See, for example, McMichael and Belair Insurance Company Inc., (FSCO P05-00006, March 14, 2006).
24. 24Arbitration decision, p. 39.
25. 25Arbitration decision, p. 24.
26. 26Arbitration decision, pp. 37-38.
27. 27As the arbitration transcript begins on June 23, 2004, the discussion about Dr. Mayer’s report was not transcribed.
28. 28In response to the insurer's stay and fresh evidence motions in the appeal, Mr. Kanareitsev's counsel claimed the report was produced to the insurer in February 2004. I preferred the insurer's evidence that it received Dr. Rathbone's report on November 8, 2004.
29. 29A partial stay was ordered on other grounds.
30. 30(FSCO A04-002373, September 12, 2006).