Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 158

Appeal P05-00017

OFFICE OF THE DIRECTOR OF ARBITRATIONS

Mr. K

Appellant

and

TD HOME AND AUTO INSURANCE COMPANY

Respondent

Before:

David Evans

Representatives:

Albert Conforzi for Mr. K

Dwain Burns for TD Home and Auto

Hearing Date:

December 7, 2005

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 dismissed and the arbitrator's decisions, dated January 6, 2005 and May 27, 2005, are confirmed.
If the parties are unable to agree on the expenses of the appeal, I may be contacted in accordance with Rule 79 of the Dispute Resolution Practice Code.

October 3, 2006

David Evans Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. K appeals the first arbitration decision of January 6, 2005 and the second decision of May 27, 2005 (a variation/revocation order). The arbitrator who issued both decisions ultimately held that Mr. K is not entitled to income replacement benefits ("IRBs"¹) after February 1, 2002. He also denied most of Mr. K's claims for medical reports and certificates and his claim for a special award. Since the appeal was filed, the arbitrator issued an expense decision, finding that each party should bear their own expenses of the arbitration proceeding.² That decision is not addressed here.

II. BACKGROUND

Mr. K was injured in an accident on November 6, 2000. Causation was a fundamental issue with respect to the ongoing physical and psychiatric effects of that accident. In particular, the insurer submitted at the arbitration that, because of Mr. K's pre-existing psychiatric condition, he was "in legal terms, a 'crumbling skull.'"

The background for its statement is as follows: During the 1990s in British Columbia, Mr. K suffered periodic episodes requiring hospitalization for psychiatric treatment. The arbitrator noted that the consensus medical opinion was that Mr. K suffers from schizoaffective disorder. Dr. Susan Finch saw Mr. K both in British Columbia and in Ontario. She testified before the arbitrator that a person with schizoaffective disorder often has symptoms of both schizophrenia and bipolar disorder, and that these patients have a decline of function over time and do not come back to baseline.

Mr. K moved to Ontario in 1999 which, as the arbitrator noted, removed Mr. K from the support he had in B.C. He also failed to take his prescribed medications. After his arrival, Mr. K rented a room in a rooming house, whose owner hired him to clean cars at his car-detailing business in Mississauga. Mr. K worked for about 11 months until he suffered injuries in the motor vehicle accident of November 6, 2000. The arbitrator wrote: "[Mr. K] had found work and was unable to return to that work immediately following the accident." The insurer started paying IRBs.

A few weeks after the accident, Mr. K's psychiatric problems recurred, and he was hospitalized from January 31, 2001 to the end of May 2001.

In his first decision, the arbitrator stated: "Liberty³ paid income replacement benefits until February 1, 2001 when it learned that Mr. K was hospitalized with a psychiatric condition from which he had suffered for over ten years." [Emphasis added.] He held that Mr. K was entitled to benefits up to August 28, 2001 (three month's after Mr. K's release from psychiatric hospital). Paragraph 1 of his order read:

Liberty shall pay to Mr. K income replacement benefits from February 1, 2001 to August 28, 2001, together with interest calculated according to section 46 of the Schedule.

In fact, Mr. K was paid IRBs until February 1, 2002. It was only after an insurer's examination in August 2001 that the insurer served initial notice of its intention to terminate benefits. Mr. K requested a disability assessment by a designated assessment centre ("DAC"), which was conducted from October 2001 through January 2002. (At the end of December 2001, Mr. K was again hospitalized for 20 days for psychiatric problems.) It was on the basis of this DAC that the insurer terminated benefits. Nonetheless, in the second decision, the arbitrator held that the benefit termination date was irrelevant because after August 28, 2001, Mr. K's "disability was caused by his psychiatric illness and not by any impairment caused by the motor vehicle accident." He revoked and replaced paragraph 1 of his order with:

Mr. K's application for income replacement benefits is dismissed.

Mr. K appeals on the ground that there were no proven facts from which the inference could be made that he was no longer psychiatrically disabled after August 28, 2001. Mr. K also appeals the arbitrator's finding that he was no longer physically disabled on a similar basis. Finally, he appeals the arbitrator's dismissal of a number of assessment expenses on the basis that the arbitrator made unsubstantiated inferences that their timing took them outside the purview of s. 24 of the SABS–1996.

III. ANALYSIS

Mr. K submits that, having found the accident materially contributed to his initial disability, the arbitrator had no evidence to find that the material contribution of the accident extended only until August 28, 2001. However, the arbitrator found that in his analysis the applicant's condition had improved enough so that — whether as of August 28, 2001 or as of February 1, 2002 — the accident no longer made a material contribution to his condition. I see no error in principle with this conclusion, if there is evidence to support it, and as set out below I find the arbitrator did have such evidence.

As a general principle, arbitrators have accepted that an underlying condition may be aggravated by an accident, but that the effect of the accident may eventually not be a factor in any residual disability. For instance, in Stargratt and Zurich Insurance Company, (FSCO A99-000521, October 4, 2001),⁴ the applicant had a condition (dystonia) that tended to worsen over time, and the arbitrator accepted that at some point the applicant's condition reached the state it would have been in notwithstanding the accident. At such a point, benefits would no longer be payable as the residual disability could not be seen as arising from the accident. That is the heart of the arbitrator's finding with respect to causation: Mr. K was prone to disabling psychiatric episodes from which he eventually recovered, and he would likely have had another one in a few months of the accident, but the accident brought it on sooner. That background informed his entire decision. The arbitrator set it out most clearly in his expenses decision, where he stated:

... [I]n this case, Mr. K suffered an episodic psychiatric illness which disabled him from time to time. Since the disability was episodic, the nature of the pre-existing condition was relevant to several questions. It was relevant to whether his disability after the accident was due to injuries suffered in the accident or his episodic psychiatric illness. It was relevant to whether any impairment suffered in the accident aggravated his pre-existing disability. It was relevant to explain test results and assessments he underwent after the accident. It was relevant to explain the manner in which Mr. K testified. It was relevant to an understanding of the effects of the medications Mr. K took at various times. Mr. K had no insight into his illness and could not help answer these questions.

The arbitrator had evidence to conclude that Mr. K's psychiatric illness was episodic with periods of recovery in between. Aside from the years of pre-accident records he reviewed, he had the evidence of Dr. Finch. In her report of June 11, 2004, Dr. Finch wrote:

[Mr. K] has suffered from a chronic, recurrent Schizoaffective disorder-bipolar type for many years. In the past he has suffered from acute episodes of illness, regaining a functional baseline between episodes. Although functioning at baseline was somewhat variable, [Mr. K] had at times held gainful employment, lived independently, driven a car, interacted socially, etc.... Generally, [Mr. K] would go 1-2 years between acute episodes of illness, and episodes were usually precipitated by an identifiable stressor or cause.

The arbitrator therefore had grounds to consider whether or not the pattern of psychiatric disability and recovery was broken. He analyzed Mr. K's evidence and that of his experts and concluded that it had not been, rejecting Dr. Finch's evidence that Mr. K's between-episodes baseline level of functioning had deteriorated because of the accident.

The arbitrator made a number of key factual findings as part of that analysis. He considered Mr. K's evidence of cognitive disability caused by the motor vehicle accident. He noted Mr. K's testimony that since the accident, the symptoms of his illness had increased and his memory and concentration had deteriorated. However, the arbitrator reviewed ten years of pre-accident medical records and found numerous references to Mr. K's impaired concentration and memory and many references to his lack of insight into his illness. The arbitrator found no difference between Mr. K's pre- and post-accident complaints of memory and concentration problems. He found that Mr. K tended to minimize his pre-accident psychiatric problems and did not find his evidence reliable. The reliability of any reports turning on Mr. K's own statements to the assessors would be equally affected.

With respect to the accident itself, the arbitrator, after hearing from a witness to the accident, specifically found that Mr. K did not lose consciousness. Several of the reports Mr. K relied on suggested that he had lost consciousness, affecting their reliability.

With respect to the effect of medication, the arbitrator found that Mr. K's manner of testimony was not due to cognitive impairment, but rather his slow speech and responsiveness was a side effect of the medications he was on at the time of the hearing. The arbitrator then considered whether or not Mr. K was taking medications at the time of various assessments and the effect they had on the reliability of the assessments.

The arbitrator then considered the medical opinions on whether any cognitive impairment or exacerbation of Mr. K's mental illness was due to the motor vehicle accident, taking into account how each assessment dealt with Mr. K's medical history, psychiatric condition at the time of the assessment and the side effects of any medication Mr. K was taking at that time.

The arbitrator considered the psychiatric report of Dr. John O'Riordan, who assessed Mr. K on December 5, 2001 and whose report is part of the disability DAC report of January 22, 2002. The arbitrator noted that Dr. O'Riordan thought Mr. K had residual symptoms of his psychiatric illness. (I note that Dr. O'Riordan added that he felt those symptoms bore no relationship to the motor vehicle accident.) The arbitrator, having not ruled out that Mr. K's poor results in the mini mental status exam were evidence of cognitive impairment, proceeded to examine the applicant's medical reports to see if there was other evidence of cognitive impairment.

The arbitrator considered the evidence of Dr. John VanDeursen, a psychologist who assessed Mr. K on two occasions in April 2002.⁵ He found that although, as Dr. VanDeursen noted, Mr. K was taking a number of psychotropic medications, Dr. VanDeursen did not deal with the evidence that Mr. K was particularly intolerant to those medications or that pre-accident he functioned more normally between hospitalizations when not taking them. More importantly, he found that Dr. VanDeursen failed to deal with the doubts he expressed throughout his report. Indeed, although Dr. VanDeursen found Mr. K substantially unable to perform his job, he did not have Mr. K's extensive pre-accident records, and it is difficult to give much credence to his conclusion in light of this statement:

Mr. [K] is presenting with a long-standing major mental illness that predates his accident. Information concerning this history is almost entirely missing and unavailable for review. No confidence can be given to any diagnostic statement that fails to carefully consider the details of his full history.

I find the arbitrator committed no error of law in disregarding this report.

The arbitrator noted that Dr. VanDeursen recommended that Mr. K undergo a neuropsychological examination to rule out potential cognitive impairment caused by the accident. Accordingly, he next considered the neuropsychological assessment conducted by Dr. John Gilman over two days in February 2003.

The arbitrator rejected Dr. Gilman's conclusion that Mr. K suffered a mild brain injury. He noted that Dr. VanDeursen, in recommending a neuropsychological examination, suggested that it be coordinated with Mr. K's treating psychiatrist as the person best able to clarify when testing could be reliable. The arbitrator noted that he had no evidence that Mr. K's treating psychiatrist, Dr. S. Lalani, had any input into Dr. Gilman's assessment. He also noted that it would have been helpful to have Dr. Lalani's opinion on how the medications he prescribed might affect the test results. The arbitrator referred to a neuropsychological assessment from 1995 which suggested "a profile of mild cognitive dysfunction not unlike that seen in persons with schizophrenia." The arbitrator also referred to a report by Dr. David Duncan, psychologist, who assessed Mr. K on June 20 and July 18, 2003 as part of a medical rehabilitation DAC to assess Dr. Gilman's treatment plan. Dr. Duncan wrote that "[Mr. K]'s scores were so low, that they indicated that he was deliberately choosing incorrect answers" and concluded that his poor performance on the other cognitive measures could not be taken as evidence of cerebral dysfunction. In light of this evidence, I see no error of law in the arbitrator's rejection of Dr. Gilman's conclusion.

Finally, with respect to psychiatric impairment, the arbitrator considered the evidence of Dr. Finch, who testified at the hearing. She assessed Mr. K in Kingston in June 2004. The arbitrator noted her testimony that, when she examined Mr. K, she thought that his speech had slowed down and he had difficulty finding words. She noted poverty of thought, no spontaneous thoughts, and long pauses before answering questions. He did very poorly on the mini mental status exam, and she reported and testified that Mr. K had lost his mechanical ability. She concluded that most of what she saw was due to cognitive impairments. The arbitrator wrote:

However, Dr. Finch was not sure what medications Mr. K was on when she saw him and her testimony that it was possible that the medications might affect his cognitive abilities does not reconcile with the evidence that the reports of Mr. K's slow speech and response time were always coincident with him taking antipsychotic medications and other medications which increased the sedating effect of those medications.

As well, Dr. Finch was mistaken when she reported that Mr. K was unable to do any mechanics or dismantle objects. A psychiatrist reported that in March 2001, Mr. K was placed in seclusion for flooding a bathroom and slowly dismantling the ward.

Accordingly, he did not find Dr. Finch's conclusion of cognitive impairment reliable because it was based on inaccurate and inadequate information and did not deal with the medication's side effects. I find no error of law.

Implicitly, in reviewing these reports, the arbitrator concluded that the poor results of the applicant at the disability DAC were not the result of cognitive impairment. I find no error in this conclusion, nor in his conclusion that the motor vehicle accident did not significantly contribute to any disability due to cognitive impairment Mr. K experienced beyond February 1, 2002.

Mr. K also appeals the arbitrator's finding that Mr. K was not disabled physically from returning to his work as a car detailer. He submits that the arbitrator found he was initially physically disabled after the accident and had no evidence to show he was not disabled at any point thereafter. He submits that the arbitrator also failed to consider objective evidence of physical disability.

The arbitrator only dealt with the physical aspect in his first decision, and he did not go into great detail, at least compared to his analysis of Mr. K's psychiatric problems. He found that Mr. K was physically disabled after the accident up to the time of the post-accident psychiatric break. The arbitrator wrote in the first decision:

[Mr. K] had found work and was unable to return to that work immediately following the accident.... [I]t is likely that the trauma surrounding the accident and the inability to return to work immediately after the accident, at a time when Mr. K had no social support, likely made a significant contribution to the onset of his illness.

In the second decision he wrote:

I decided that Mr. K was disabled from returning to his work as a result of injuries suffered in the motor vehicle accident up to August 28, 2001. Thereafter, any disability was caused by his psychiatric illness and not by any impairment caused by the motor vehicle accident.

The arbitrator selected that date based on Mr. K's prior history of episodic psychiatric illness and recovery. His analysis of the medical reports with respect to Mr. K's physical disability shows that he considered them unreliable to the extent they ignored that history or the effect of the medications on Mr. K's physical performance. (I note that the disability DAC assessors who discussed Mr. K's physical disability concluded that Mr. K was substantially able to perform his pre-accident employment.)

For example, in the physical impairment section of his decision, the arbitrator first rejected all five functional ability assessments conducted by both parties between June 2001 and April 2002 on these terms:

Despite all these test results, no one did any meaningful analysis in an attempt to prove that any particular results were preferable. Nor did I receive any evidence to shed light on whether Mr. K's psychiatric illness or medications affected the test results or conclusions. The only conclusion I can draw from the opposite conclusions reported is that I cannot tell whether any of these functional abilities assessments were objective or scientific. I do not find any of the functional abilities evaluations useful.

The arbitrator discounted several other reports dealing with Mr. K's physical disabilities based on the findings and conclusions set out in this paragraph:

Many assessors found that Mr. K was a poor historian. I found several references both before and after the accident of Mr. K having no insight into his illness. Mr. K hoped that he could escape his illness by moving to Ontario, although the psychiatric evidence is consistent that his illness is not currently curable. Mr. K testified that some doctors support him in his decision to stop taking psycho tropic medications after discharge from hospital, whereas the evidence I heard was consistent that Mr. K should take these medications for the rest of his life. At this hearing, and to various assessors, Mr. K minimized the effects of his psychiatric illness and emphasized that his condition has significantly deteriorated after the accident. I find Dr. VanDeursen's opinion that Mr. K perceived himself fully disabled as a result of the accident and that he is clearly invested in believing that his problems are due to the accident also apply to Mr. K's testimony and reports that he is physically disabled.

On that basis, the arbitrator rejected the report of Dr. Thomas John, a physiatrist, who examined Mr. K in March 2002, because much of his opinion was based on Mr. K's subjective reports. He also rejected the report of Dr. D. J. Ogilvie-Harris, orthopaedic surgeon, because he found Mr. K's self-reports of pain and limitation of movement not reliable. I find no error of law in that conclusion.

Mr. K submits that the arbitrator did not deal with the objective evidence of right knee injury. He refers to an insurer's examination by Dr. P.H. Grant of August 14, 2001. Dr. Grant found that Mr. K should be able to return to work as a detailer, although he "should avoid repetitive or prolonged squatting, kneeling, crawling and climbing." Based on his physical exam, he found mild patellofemoral crepitation in the right knee suggestive of trauma to the patellofemoral cartilage of the right knee. Dr. Grant noted that this would likely leave Mr. K with minor permanent impairment of right knee function.

This is an important point and could have been dealt with in more detail by the arbitrator. I note in that regard that the arbitrator also conducted very little analysis of the essential tasks of Mr. K's job. However, he found that Mr. K's actual impairment did not reach a disabling level because of the abilities he displayed under surveillance:

Mr. K testified that he cannot return to his job because he cannot squat "at all" due to pain in his right knee. Mr. K was asked in cross-examination about his ability to ride his bicycle and Mr. K testified that he had not ridden his bicycle in some time and that his ability to ride a bicycle was diminished because of his injuries. Video surveillance taken in November 2002 shows Mr. K squatting to lock his bicycle. It also shows him riding the bike while carrying a parcel in one hand and pushing the bicycle up a hill. He also said that he cannot work because he cannot walk two or three blocks or stand all day. Mr. K explained that he was probably in pain in the video.

The arbitrator was not satisfied with Mr. K's explanation. Since Mr. K continued to complain that he could not squat even after the date of the surveillance, the arbitrator also concluded that Mr. K could squat at an earlier date. I am not convinced that in this conclusion he committed an error of law.

Finally, the arbitrator rejected most of the claimed s. 24 assessments. His rejection of some of these assessments did not turn on the error in the date of termination. For instance, as noted above, he rejected the functional ability assessments. In his second decision, he only dealt with the cost of the physiatry assessment by Dr. John in the amount of $1,500. He changed a sentence to show that the assessment occurred two months after termination, not 14 months after. He still rejected the assessment on the grounds that "[s]ince the assessment was performed after mediation, the report is more in the nature of a medical-legal report and recoverable as an expense of the arbitration and not as a cost of an examination under section 24." This was an error, since the assessment was in March 2002 and although the mediation application had been filed by that point it was not concluded until later. However, in M.D. and Halifax Insurance Company, (FSCO P00-00049, May 16, 2001), the Director held that an assessment arranged for the purpose of challenging the DAC through the dispute resolution process is better viewed as a litigation expense. The arbitrator's conclusion was not necessarily an error of law, then, since he also considered the facts in determining that the assessment was not a reasonable expense under s. 24. His conclusions regarding the other s. 24 claims are defensible on the same grounds.⁶ I find the arbitrator committed no error of law in rejecting these claims.

In light of the above, I also see no error in the arbitrator's denial of a special award.

In conclusion, it is understandable that the applicant sought to vary and then appeal the arbitrator's decisions. He felt that the arbitrator's mistake about the date of termination related to a fundamental aspect of the claim. However, in the circumstances of this case, and for the reasons set out above, I am not convinced that the arbitrator committed an error of law. I find that the arbitrator did address the issues relating to the applicant's claims and that his analysis was not fundamentally undermined by the mistake in the termination date. Accordingly, the appeal is denied.

IV. EXPENSES

If the parties are unable to agree on appeal expenses, they may contact me in accordance with Rule 79 of the Dispute Resolution Practice Code.