Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 73
FSCO A05-001045
BETWEEN:
WISSAM AYOUB
Applicant
and
AVIVA CANADA INC.
Insurer
DECISION ON A MOTION FOR INTERIM BENEFITS
Before:
Anne Sone
Heard:
By telephone conference call on December 22, 2005.
Written submissions were received on January 21, 2006.
Appearances:
Ryan P. Zigler for Mr. Ayoub
James M. Brown for Aviva Canada Inc.
Issues:
The Applicant, Wissam Ayoub, was injured in a motor vehicle accident on November 1, 2002. He applied for and received statutory accident benefits from Aviva Canada Inc. ("Aviva"), payable under the Schedule.1 Aviva terminated weekly income replacement benefits on January 11, 2005 and housekeeping and home maintenance benefits on December 22, 2003. The parties were unable to resolve their disputes through mediation, and Mr. Ayoub applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Mr. Ayoub has brought a motion pursuant to section 65 of the Dispute Resolution Practice Code —Fourth Edition for interim benefits to be paid to him pending the resolution of his dispute with Aviva.
The issue on this motion is:
Is Mr. Ayoub entitled to interim benefits pursuant to subsection 279(4.1) of the Insurance Act?
Is either party entitled to its expenses of this motion for interim benefits?
Result:
Mr. Ayoub is not entitled to interim benefits.
Both parties shall bear their own expenses of this motion for interim benefits.
EVIDENCE AND ANALYSIS:
Background
At the time of his motor vehicle accident on November 1, 2002, Mr. Ayoub was working as a customer service/production coordinator. He had also previously worked as a dispatcher and taxi cab driver. In the accident, his car was rear-ended, and he suffered injuries to his jaw, back, left shoulder and left wrist. He developed diabetes in adolescence. Prior to the accident he was diagnosed with serious coronary disease, developed cataracts in his eyes, and suffered serious complications, including four surgeries, following an appendectomy. Since the accident, he has received psychiatric care for post-traumatic stress disorder and depression, suffered a major heart attack, and has had to undergo bypass surgery.
Mr. Ayoub disputes the second termination of the income replacement benefits he was receiving following the accident. Aviva's initial termination of these benefits was reviewed by a Designated Assessment Centre ("DAC"). In its report dated March 9, 2004, the DAC concluded the following:
Based on the examination, Mr. Ayoub is substantially disabled from returning to his pre-employment duties on a psychological standpoint. He does not exhibit a substantial physical disability at this time.
According to this DAC report, at that time, Mr. Ayoub was still substantially disabled from performing the essential tasks of his employment from a psychological perspective, but not from a physical perspective. Aviva reinstated income replacement benefits until September 28, 2004, when an insurer's examination pursuant to section 42 of the Schedule concluded that Mr. Ayoub no longer met the criteria of entitlement to income replacement benefits. Aviva terminated these benefits a second time. This second termination took effect on October 29, 2004, just prior to the 104-week mark. Mr. Ayoub challenged this second termination. However, this time, the DAC assessment took place after the 104-week mark. The DAC report dated November 26, 2004 concluded as follows:
Based on the results of the assessment, it was the consensus opinion of the assessment team that Mr. Ayoub is not currently completely disabled from performing the tasks of his pre-accident employment, or any other employment for which he is reasonably suited by education, experience and training.
Accordingly, the DAC team determined that Mr. Ayoub did not suffer from a complete inability to perform the essential tasks of his employment from either a physical or psychological perspective.
Mr. Ayoub brought this motion seeking the interim payment of income replacement benefits pending the ultimate resolution of these arbitration proceedings.
The Appropriate Test for Interim Benefits
Section 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter.
An award of interim benefits is a discretionary remedy. A number of cases have set out principles intended to guide arbitrators in the exercise of this discretion.2 These principles are as follows:
(a) Generally an insured person's entitlement to benefits is to be determined after a full hearing on the evidence;
(b) Novel or difficult questions of law should be dealt with in a full hearing and not within an interlocutory proceeding;
(c) Interim benefits are not to be awarded on a routine basis, but only in certain unusual circumstances;
(d) An interim order, by its very nature is intended to cover a short period of time between the making of the order and the final order;
(e) An application for an interim order must be heard in a summary fashion and the order made expeditiously. At the arbitration hearing, after a full hearing of all the evidence, the arbitrator may well come to the conclusion that a substantially different order should be made; and,
(f) An interim order is subject to the final order and an arbitrator may order interim benefits repaid.
I note that in this case, I have not heard any oral testimony, and the record consists of unchallenged affidavit and other documentary evidence.
Bearing in mind these principles, previous decisions at the Commission have identified three criteria to be considered for an award of interim benefits, namely,
(a) The merits of the case for entitlement.
(b) The existence of an element of necessity or urgency.
(c) A blatant disregard by the insurer of the Schedule or Act.
Mr. Ayoub submits that the three criteria above are to be read in a disjunctive fashion. He suggests that an award of interim benefits could be made where any of the three criteria has been established, specifically the third criterion. He relies on a line of cases including the decisions in Sweete and Jevco Insurance Company3 and Coutu and Wawanesa Mutual Insurance Company.4
Based on the disjunctive approach, Mr. Ayoub argues that he should receive interim benefits because of three flaws in the second DAC report, namely:
(a) That the DAC improperly assessed him based on the post-104 week test of a "complete inability to perform the essential tasks of any employment for which he is reasonably suited by training, education or experience" when he should have been assessed on the pre-104 week test of a "substantial inability to perform the essential tasks of his employment";
(b) That the DAC failed to properly identify an employment cluster to be applied in the post-104 week test; and,
(c) That the DAC failed to properly deal with the surveillance with which it had been provided.
While the initial line of cases identified by Mr. Ayoub did hold that the third criterion, a "blatant disregard" of the legislation, could justify an award of interim benefits on its own, Aviva submits that there have been a number of different approaches, and subsequent decisions of the Commission have retreated from this position. More recent decisions have considered these same authorities, and have explicitly rejected such an approach.5
These recent decisions have indicated that the applicant must still establish a prima facie case on the merits and a degree of urgency or necessity. These cases have concluded that the base requirements of a prima facie case and a sense of urgency are more consistent with the well-accepted principle that an award of interim benefits is an extraordinary and not routine remedy. As stated by Arbitrator Allen in Gandhi and Motor Vehicle Accident Claims Fund:
I find, in accordance with the Commission decisions that concur with the Simpson arbitration case, that the Applicant would have had to establish a prima facie case, some urgency or necessity and a blatant disregard for the Insurance Act or the Schedule in establishing a claim for interim benefits. I find that these criteria are in keeping with the extraordinary and exceptional nature of a grant of interim relief.
I concur with Arbitrator Allen's approach, and agree that it is appropriate to keep the requirements of at least a prima facie case and a sense of urgency where an applicant is seeking interim benefits, because it is an extraordinary remedy.
Alternatively, in the decision of Nguyen and State Farm Mutual Automobile Insurance Company,6 Arbitrator Wilson's preferred approach is to "look at the whole case", and consider the strength of the case from the perspectives of both parties. Under this approach, it is open to an arbitrator to award interim benefits where, based on the evidence before the Commission, the applicant would ultimately be successful. Where a summary review of the evidence leads to an ambiguous result (perhaps because further elaboration or cross-examination is required), then it cannot be said that the applicant is likely to be successful, and neither test can be satisfied.
Blatant disregard for the Schedule
Based on the disjunctive approach, Mr. Ayoub submits that he should receive interim benefits because of three flaws in the second DAC report, set out above.
Mr. Ayoub also submits that the continued denial of income replacement benefits, in light of these alleged shortcomings, constitutes a "blatant disregard" of the Schedule.
On the other hand, Aviva submits that none of these alleged procedural shortcomings, when properly considered in context, are relevant to the decision reached, or are even prejudicial to
Mr. Ayoub. As a result, in Aviva's view, its continued denial of income replacement benefits, in light of the second DAC report, even if incorrect, cannot be said to constitute a "blatant disregard" of the Schedule.
The use of the "complete Inability" test
Mr. Ayoub submits that the DAC applied the incorrect test. However, Aviva states that this submission is unfounded.
Mr. Ayoub's accident occurred on November 1, 2002. As a result, the 104-week mark fell on November 1, 2004 - a Monday. According to subsection 5(1) of the Schedule, entitlement for income replacement benefits relating to the period prior to November 1, 2004 is to be determined in accordance with the "substantial inability" test. Entitlement beyond November 1, 2004 is to be determined in accordance with the more stringent "complete inability" test.
While the decision to terminate Mr. Ayoub's income replacement benefits was made on October 8, 2004, the termination did not actually become effective until October 29, 2004. This was the Friday before the 104-week mark. Mr. Ayoub continued to receive income replacement benefits until the effective date of the termination. In other words, at that time, Mr. Ayoub was paid for all but two days of his 103 weeks of income replacement benefit eligibility.7
Thus, by the time the termination had actually taken effect, Mr. Ayoub had received almost virtually all of the income replacement benefits available to him as a result of a "substantial inability" test. Practically speaking, Mr. Ayoub could only receive further income replacement benefits if he suffered from a "complete inability to engage in any employment for which he is reasonably suited by reason of his education, training or experience," pursuant to paragraph 5(2)(b) of the Schedule. Aviva submits that it was not open to Mr. Ayoub to challenge the termination based on a "substantial inability" because the payment of income replacement benefits based on a "substantial inability" test were not in dispute. According to Aviva, it had already paid Mr. Ayoub in full for that period. In its view, the only potential dispute available to Mr. Ayoub was whether he suffered a "complete inability."
Although strictly speaking Mr. Ayoub was not paid initially for the last two days of income replacement benefits, I find that he was paid at that time for substantially all of the 103 week period to which he was entitled.8Therefore, I do not find that the use of the "complete inability" test constituted a disregard of the Schedule sufficiently blatant to warrant an order that Aviva pay interim benefits.
Dr. Waxer's application of the ""complete inability" test
Mr. Ayoub also argues that Dr. Waxer, the DAC psychologist, did not properly apply the "complete inability" test. In support of this argument, Mr. Ayoub points to one section of Dr. Waxer's report where Dr. Waxer stated:
I took some time to discuss my findings with Mr. Ayoub today and he was in agreement that although he continues to experience significant psychological distress, he, likewise, did not believe that he was totally incapacitated.
Mr. Ayoub submits that Dr. Waxer's use of the term "totally incapacitated" suggests confusion over the proper test.
However, further down in Dr. Waxer's conclusion, he states:
However, it is my professional opinion that Mr. Ayoub does not suffer a complete inability to engage in any employment which he is reasonably suited by education, training or experience. [Emphasis added].
In the circumstances, it is hardly clear that Dr. Waxer either misapplied or did not properly appreciate the "complete inability" test. Dr. Waxer's use of the term "totally incapacitated" is an area that could be explored in his testimony at the ultimate hearing. Accordingly, it may be incorrect to state that the presence of the use of this term clearly demonstrates that Dr. Waxer did not properly apply the correct test.
The identification of an employment cluster
Mr. Ayoub also argues that the DAC failed to properly identify an employment cluster, as required by the Disability Designated Assessment Centre Assessment Guide ("DAC Guide").
Aviva does not dispute that the DAC Guide requires the identification of an employment cluster. Nor does it dispute that the DAC report in question makes no mention of an employment cluster. Aviva does dispute the relevance of this omission, and its effect. Aviva submits that the absence of an employment cluster did not affect the decision ultimately reached by the DAC, and did not cause any prejudice to Mr. Ayoub in this case.
Pursuant to pages 4 - 3 and 4 - 4 of the DAC Guide, the DAC assessment is based on a team consensus-building process. Under this process, all of the assessors collaborate to determine whether the claimant satisfies the test of entitlement. The decision that is ultimately reached is a joint decision, and involves the participation of all assessors.
In this case, the DAC team based its opinion on Mr. Ayoub's pre-accident employment, the tasks and demands of which were detailed in the Functional Abilities Evaluation performed by Ms. Candice Wong and Dr. Hui.
After considering Mr. Ayoub's pre-accident employment in detail, the consensus of the DAC team in the DAC Summary report was that Mr. Ayoub did not suffer from a "complete inability" from performing the tasks of his pre-accident employment.
Based on the results of the assessment, it was the consensus opinion of the assessment team that Mr. Ayoub is not currently completely disabled from performing the tasks of his pre-accident employment, or any other employment for which he is reasonably suited by education, experience and training. [Emphasis added.]
Since the DAC team concluded that Mr. Ayoub did not meet the "complete inability" test with respect to his own pre-accident employment, Aviva submits that the absence of an employment cluster in the present case is irrelevant. It states that even if an employment cluster had been generated, the DAC team would not have needed to consult any of the other possible forms of employment given the consensus reached.
Further, given the consensus that was reached, Aviva states that it is impossible to say that Mr. Ayoub was prejudiced in any way by the lack of an employment cluster - something which Mr. Ayoub essentially admitted during the course of his own submissions.
In response, Mr. Ayoub points to the wording used in Dr. Waxer's report, where Dr. Waxer's conclusion speaks to "... any employment which [Mr. Ayoub] is reasonably suited..." rather than making explicit reference to Mr. Ayoub's own employment. Mr. Ayoub suggests that this wording indicates that Dr. Waxer did not reach his conclusion based upon Mr. Ayoub's pre-accident employment, but rather relied upon various unidentified forms of employment.
However, without an employment cluster, Aviva submits that Dr. Waxer's conclusion could only have been formed with respect to Mr. Ayoub's pre-accident employment. Dr. Waxer could not as a DAC assessor reach such a conclusion in a vacuum. Further, Aviva submits that the consensus of the DAC team, a consensus with which Dr. Waxer would have concurred, based its conclusion on Mr. Ayoub's own employment.
Aviva argues that while the lack of an employment cluster may be an area to be explored during a full hearing, it cannot be said to vitiate the DAC opinion.
Use of surveillance
Finally, Mr. Ayoub argues that the DAC failed to properly comment on the surveillance evidence provided to the assessors.
DAC General Guideline # 1 stipulates that a DAC is to comment upon surveillance in its report, and explain the reason why the surveillance was either used or disregarded. DACs are additionally required to review with the claimant any surveillance evidence it finds to be of assistance.
In the present DAC report, the DAC assessors confirm that they were provided with, and reviewed, surveillance footage. However, none of the assessors place much emphasis on this footage. Dr. Chan, orthopaedic surgeon, describes the contents of the surveillance, but does not state whether or not the surveillance assisted him in his assessment. Likewise, Dr. Waxer states that he also reviewed the surveillance, but does not mention whether it is of assistance.
Mr. Ayoub's claim for income replacement benefits is based on his psychological impairments, and not his physical ones. There is no medical evidence to support a claim of entitlement from a physical standpoint - a point conceded by Mr. Ayoub during his submissions.
Aviva submits that surveillance footage, by its very nature, can only document the presence or absence of objective, physical symptoms. In its view, surveillance evidence could only be of very limited assistance with respect to psychological impairments, such as the ones alleged by Mr. Ayoub. Aviva argues that the failure to directly comment upon surveillance evidence when the nature of the impairment at issue is psychological, is not an omission that is relevant to the DAC's consensus opinion. It is open to question whether Mr. Ayoub was prejudiced by this omission.
Conclusion regarding whether a blatant disregard of the Schedule or the Act occurred
Mr. Ayoub vigourously asserts that the flaws and the omissions in the DAC report constitute a blatant disregard of the Schedule and the Act by Aviva. Aviva submits that none of the alleged shortcomings in the DAC report are relevant or even prejudicial to Mr. Ayoub. In its view, the alleged shortcomings are ones of form, not substance.
When considering a motion for interim benefits in Galati and Aviva Canada Inc.,9 Arbitrator Feldman noted that procedural shortcomings with respect to form do not create ongoing entitlement to benefits unless the claimant has been deprived of the right to a DAC assessment, especially under the less draconian provisions of Bill 59 - the version of the Schedule applicable in the present case.
Aviva submits that even if Mr. Ayoub's allegations of flaws in the DAC report have any merit, such flaws have not prejudiced Mr. Ayoub in any way, let alone deprived him of his right to a DAC assessment. Thus, Aviva states that the continued denial of income replacement benefits in this case cannot be said to constitute a "blatant disregard" of the obligations under the Schedule and the Act, such that Mr. Ayoub should be entitled to interim benefits, even if the disjunctive approach is applied. Although there are questions and concerns regarding the DAC process, in my view, these issues are best left to be more fully explored at the hearing of this case. This is not a situation where, for example, the insurer did not offer a DAC when it should have. Accordingly, I find that there has not been a blatant disregard of the Schedule or Act in this case that warrants an order for interim benefits. As set out above, I do not agree with the disjunctive approach to the award of interim benefits. However, in the event that the disjunctive approach to interim benefits applies in this case, I will look at the merits of Mr. Ayoub's case for entitlement, and the existence of an element of necessity or urgency.
Merits of Mr. Ayoub's case for entitlement to income replacement benefits
Aviva submits that a summary review of the evidence before the Commission does not demonstrate that Mr. Ayoub will likely be successful at arbitration, regardless of whether the prima facie case approach, or whether Arbitrator Wilson's "look at the whole case" approach, is used. Mr. Ayoub disagrees.
The issue of entitlement here revolves around Mr. Ayoub's ability to return to work from a psychological perspective. The medical opinions before the Commission are divided on this issue.
On the one hand, reports provided by Dr. Hanick and Dr. Zutshi are suggestive of entitlement. On the other hand, the conclusions of the DAC and of Dr. Lau are against entitlement.
Based on the evidentiary record before the Commission, it is impossible to say that Mr. Ayoub is likely to be successful at a full hearing. The best way the competing opinions can be reconciled is through viva voce testimony, at a full hearing. I also note that Mr. Ayoub initially applied for an oral hearing rather than one in writing.
Since the evidentiary record before the Commission is contradictory, it is difficult to say that Mr. Ayoub has demonstrated a prima facie case. Alternatively, "looking at the whole case," it is not readily apparent which party will be successful at the hearing. Thus, I find that this is a matter where an award of interim benefits based on a prima facie case is not appropriate.
Urgency or necessity
As indicated above, Mr. Ayoub must demonstrate some sense of urgency or necessity before an award of interim benefits may be appropriate. However, it must be remembered that an award of interim benefits is an extraordinary remedy that is not to be awarded on a routine basis. As a result, interim benefits cannot be awarded merely because an applicant is suffering financial hardship while disputing the termination of income replacement benefits. If that were the case, interim benefits would routinely be awarded in any case in which the termination of income replacement benefits was in dispute.
In Coutu and Wawanesa,10 Arbitrator Renahan pointed out that virtually all claimants who are challenging a termination of income replacement benefits will suffer some financial hardship while waiting for the resolution of the dispute. However, as Arbitrator Renahan explained, the Schedule already contains provisions to compensate a claimant for such financial hardship by way of a high compounded interest rate, and the potential availability of a special award.
Generally, a disabled insured is entitled to weekly income replacement benefits or loss of earning capacity benefits to replace a portion of his or her lost income. When the insurer terminates those benefits and the insured claims that he or she still cannot return to work, the insured will normally suffer financially. This is particularly so, when most claimants are of modest or low income and do not have income protection plans from employment. This is one reason an insured seeks, and is entitled to, as speedy a resolution of his or her claim as possible. However, the routine financial suffering that one expects in these circumstances, by itself, is not grounds to satisfy the urgency requirement. If it were, applications for interim benefits and interim orders would become more routine. In my view, the usual financial loss and suffering an insured endures where a court or arbitrator later determines that the insured was entitled to benefits which the insurer withheld, is compensated for by the automatic payment of interest at 2 per cent per month provided for in the Schedule. Where the decision maker finds that the insurer unreasonably withheld benefits, the insured is compensated by a special award under subsection 282(10) of the Insurance Act [Emphasis added.]
In keeping with the principle that an award of interim benefits is an extraordinary remedy, a claimant seeking interim benefits must show some extraordinary financial hardship, in the circumstances.
Unlike other cases where interim benefits have been claimed such as Ms. Z. and Dominion of Canada General Insurance Company11, Mr. Ayoub has not provided any details of the financial hardship he states he is suffering - something which Mr. Ayoub admitted in his own submissions. Mr. Ayoub does not provide an explanation of his ongoing expenses or any details of any other means he might have available to him. Mr. Ayoub does not state that he is in any financial jeopardy, such as defaulting under a mortgage for example.
The only evidence presently before the Commission with respect to urgency or necessity is found in the last paragraph of Mr. Ayoub's affidavit, where he states that he has been without income since January 2005, and has been suffering financial hardship.
Although this is not determinative, I also note that under these circumstances, there may be prejudice to an insurer, if an applicant is ordered to repay interim benefits already received, and is unable to do so.
Based on the evidentiary record before the Commission, Mr. Ayoub has failed to demonstrate that he is suffering anything beyond the routine financial hardship that one would expect in any arbitration proceedings where the termination of income replacement benefits is in dispute. Aviva submits that Mr. Ayoub has not met his onus to demonstrate that his case is one of extraordinary circumstances where an award of interim benefits is justified. I agree.
I find that in the present case, Mr. Ayoub has failed to demonstrate the urgency or necessity required to justify an award of interim benefits.
Conclusion
Mr. Ayoub has failed to establish a blatant disregard of the Schedule or the Act or a sense of urgency or necessity. The evidentiary record contains contradictions. Accordingly, I find that this is not a case where it would be appropriate to award interim benefits. Thus, the present motion is dismissed. I thank the parties and their counsel for their excellent submissions.
EXPENSES:
Bearing in mind the criteria set out in section 12 of the Expense Regulation12, I note that Aviva was ultimately successful on Mr. Ayoub's motion for interim benefits. On the other hand, Mr. Ayoub raised some interesting and provocative issues. I also did not find any conduct that tended to prolong, obstruct or hinder the proceeding. Nor was any aspect of the proceeding improper, vexatious or unnecessary. Under all these circumstances, I order both parties to bear their own expenses of this motion for interim benefits.
May 12, 2006
Anne Sone Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 73
FSCO A05-001045
BETWEEN:
WISSAM AYOUB
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:
Mr. Ayoub's application for an order compelling payment of interim income replacement benefits is dismissed.
Both parties shall bear their own expenses of this motion for interim benefits.
May 12, 2006
Anne Sone Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- Ioannidis and Canadian General Insurance Group, (OIC A97-001551, December 15, 1997) and Ms. Z and Dominion of Canada General Insurance Company, (FSCO A98-000124, September 25, 1998).
- (OIC A96-000614, October 24, 1996). In this case, the arbitrator relied, in part, on the insurer's failure to comply with its obligations under section 64 of the Schedule (regarding termination of benefits) to order interim payment of benefits.
- (FSCO A97-001916, June 5, 1998). In this case, the applicant was assessed at a DAC which was not authorized to conduct the assessment. Her income replacement benefits were terminated on the basis of the DAC's report.
- Gandhi and Motor Vehicle Accident Claims Fund, (FSCO A-000697, November 14, 2002) and Mitzi and York Fire & Casualty Insurance Company, (FSCO A01-000176, July 17, 2001).
- (FSCO A05-000305, December 22, 2005).
- The first seven day period is not recoverable under paragraph 5(2)(b) of the Schedule.
- Subsequently, Aviva paid income replacement benefits until January 11, 2005, well past the 104-week mark.
- (FSCO A04-001256, August 19, 2005).
- (FSCO A01-001446, June 21, 2002).
- (FSCO A98-000124, September 25, 1998).
- O.Reg. 664, R.R.O. 1990, made under the Insurance Act, as amended.