Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2009 ONFSCDRS 149

Appeal P08-00013

OFFICE OF THE DIRECTOR OF ARBITRATIONS

APRIL PICHE (Now known as April Loyst) Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA Respondent

BEFORE: David Evans

REPRESENTATIVES: Andrew R. Kerr for Ms. Loyst Ian D. Kirby for Allstate Insurance Company of Canada

HEARING DATE: January 15, 2009

APPEAL ORDER

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

The arbitrator’s March 6, 2008 decision is confirmed and Ms. Loyst’s appeal is denied.
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

November 4, 2009

David Evans Director’s Delegate Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Ms. Loyst appeals the arbitrator’s decision of March 6, 2008 dismissing her claims under the SABS–1996¹ for income replacement, rehabilitation, attendant care, and housekeeping benefits.

II. BACKGROUND

Ms. Loyst was in an automobile accident on November 14, 2003. Allstate paid income replacement benefits (IRBs) of $235.86 a week to December 12, 2005, certain medical/‌rehabilitation expenses, attendant care benefits from November 14 to December 12, 2003, and housekeeping benefits from November 14, 2003 to February 28, 2004.

At the time of the accident, Ms. Loyst was unemployed but in the previous year had worked as a security guard and had done some temporary subcontracting work for her mother as a postal delivery person. The parties agreed that she was not able to return to her former employment.

The appeal focused mostly on Ms. Loyst’s claim for (a) funding for a university education and (b) an increased IRB benefit. Regarding (a), she decided to pursue a career as a probation and parole officer based on earlier career goals and sought funding for a B.A. in psychology and politics that she started in September 2004. Regarding (b), she claimed that her IRBs should have reflected income earned in a roofing business with her husband. In her 2003 income tax return filed in 2006 she declared all the roofing business income even though her husband did all the roofing and she only spoke to clients and kept the books.

Ms. Loyst returned to work in June 2005 without informing Allstate. The arbitrator therefore ordered repayment of $4,478.11. First, this is relevant because it affected the arbitrator’s assessment of Ms. Loyst’s credibility. Second, while the repayment award itself is not under appeal, Ms. Loyst submits that it is offset by the higher IRBs she should have received had Allstate included the roofing business income in calculating the IRBs. This was an aspect of a preliminary issue decision on appeal.

Ms. Loyst’s credibility was initially considered by the arbitrator in a preliminary issue decision dated August 3, 2007. Allstate disputed Ms. Loyst’s allegation that she was driving the car involved in the accident and that her husband, Mr. Carl Piche, was a passenger. While the arbitrator concluded that Ms. Loyst was indeed the driver, his decision includes the following:

Mr. Piche testified that he never had a driver’s licence. The arbitrator did not believe Ms. Loyst’s testimony that in November 2003 she was unaware of this.
While Ms. Loyst and Mr. Piche both acknowledged that he drove the vehicle on occasions other than the day of the accident, the arbitrator found that the conflict in their evidence about when this occurred undermined her credibility more than his.
The arbitrator found that Ms. Loyst’s conduct in continuing to receive IRBs between June and December 2005 while working was misleading and also undermined her credibility.

Subsequently, in his decision of March 6, 2008, the arbitrator noted that his earlier credibility findings influenced his approach regarding the alleged roofing business income. Of greater concern to him than its allocation in Ms. Loyst’s 2003 Income Tax Return was that she did not file until 2006 and then presented no “verifiable business records” to Allstate or at the hearing. In ordering repayment, he stated: “Given my doubts about Ms. Loyst’s credibility, I am not prepared to accept her unsubstantiated evidence that she earned income merely because, at a point well after the accident, she told Revenue Canada that she did.”

Ms. Loyst requested a stay of the repayment order, which was denied by Director’s Delegate Blackman. He noted that Ms. Loyst asked for a stay on the grounds that she was a single person raising three children on limited income and that a successful appeal would offset the amounts owing. As part of considering the bona fides of the appeal, the delegate set out over a couple of pages the ways in which the arbitrator found Ms. Loyst’s credibility lacking. In addition, he pointed out that s. 283(1) of the Insurance Act restricts appeals of arbitration decisions to questions of law and that there was “an arguable concern as to the prospect of success for those grounds of the appeal which, at first glance, appear to pertain more directly to questions of fact.” He was not persuaded that Ms. Loyst had “set out a case, let alone a compelling case or exceptional circumstances for a stay, wherein the deference normally given an arbitrator who had the advantage of hearing all of the evidence, should be displaced based either on the substance or bona fides of the appeal, specifically in circumstances where the repayment order sought to be stayed arises from the Appellant’s own misrepresentation.”²

As of the time of the appeal hearing, no repayment had been made or attempted.

III. ANALYSIS

Appeals from the decision of an arbitrator are restricted to questions of law. Perhaps that is why several aspects of the arbitrator’s decision were not pursued in appeal. For instance, in reviewing the medical evidence, the arbitrator concluded that Ms. Loyst was not entitled to IRBs more than 104 weeks after the accident; indeed, she was ordered to make repayment because she had returned to work. This was a finding of fact and no alleged errors of law were raised.

Similarly, the arbitrator refused Ms. Loyst’s claim for a microwave oven. Again, this was a finding of fact based on the lack of medical evidence to support it, no bill for its purchase, and evidence that she already had one in 2004.

The attendant care and housekeeping claims were pursued in appeal. The arbitrator refused Ms. Loyst’s claim for further attendant care benefits under s. 16 of the SABS. Ms. Loyst claimed that she initially got help while staying with her parents after the accident and that even after she moved back to an apartment in February 2004 her mother continued to help her. However, the arbitrator noted that the testimony of Ms. Loyst and her mother as well as the invoices showed that, while less assistance was needed over time, the hours claimed remained constant. He preferred assessments that showed that attendant care was not required over the evidence of Ms. Loyst and her mother.

The arbitrator also refused Ms. Loyst’s claim for housekeeping benefits under s. 22 of the SABS beyond February 2004. He noted that the only evidence before him that Ms. Loyst required housekeeping assistance beyond then was that of Ms. Loyst and her mother, which he found unreliable. He noted the lack of supporting documentation and the unlikelihood that Ms. Loyst’s need for housekeeping assistance remained unchanged throughout 2004 or even continued into 2005.

Ms. Loyst submits that the arbitrator erred in not considering that she had paid for both these services. She submits that his failure to deal with this crucial piece of evidence meant he did not instruct himself correctly. However, the crucial question is whether or not the arbitrator thought these claims were reasonable and necessary. In both these cases, the arbitrator made findings of fact that they were not. I see no error.

This leaves the amount of the IRBs and the education claim.

Ms. Loyst submits that the arbitrator erred because her income tax return should have been accepted as prima facie evidence of her roofing business income and because there was no contrary evidence. She also disputes the arbitrator’s statement that she presented “no verifiable business records.” Whatever weight should be given to an income tax return filed some years later, the arbitrator’s statement was supported by evidence that contradicted the tax return. In particular, he referred to a McCully & Associates report dated February 26, 2004, that at p. 5 considers the roofing business’s records:

However, the monthly summaries of income and expenses are not supported by verifiable documents. Ms. Piche [as Ms. Loyst then called herself] advised that she has used the services of sub-contractors, other than her husband, and some of the transactions for the roofing operation were paid in cash. We have not been provided with a cash book or any documents to show the actual cash received and payments. Accordingly, we are unable to calculate the actual income from the roofing operations in the 52 weeks prior to the accident and the accident period.

Accordingly, while the arbitrator repeated the insurer’s submission that Ms. Loyst and her husband probably allocated the business income to her in order to avoid Mr. Piche’s child support obligations,³ his decision turned upon evidence that the business income was impossible to verify. I see no error in law.

Ms. Loyst made a claim for university tuition fees, books and a laptop computer under s. 15 of the SABS. As set out by the arbitrator, she had completed a Law and Security course at a community college in 1997 at age 21. She testified that soon after completing the course, she applied for employment with a police force but failed one of the entrance tests. She made no further applications for police or corrections employment until sometime before the accident. Ms. Loyst and her parents testified that she had always intended to become either a police or corrections officer. However, since her injuries prevented her from doing so, she decided to become a probation and parole officer and started the B.A. program referred to earlier.

The arbitrator found that an insured person’s pre-accident career goals can be relevant in determining the kinds of rehabilitation measures an insurer is required to pay for under s. 15. He noted that s. 15(4) states that “in determining whether a measure is reasonable and necessary … the insurer shall consider the insured person’s personal and vocational characteristics,” and that an almost identical definition of “personal and vocational characteristics” was considered in Attavar v. Allstate Insurance Company of Canada (2003), 2003 CanLII 7430 (ON CA), 63 O.R. (3d) 199 (C.A.) when determining residual earning capacity under the SABS-1994.⁴ In that case, the applicant had no work history but a clear career path, so the career goal was relevant. However, while the arbitrator accepted that Ms. Loyst had once had the goal of becoming a police or corrections officer, he was not persuaded she continued seeking such a career path prior to the accident:

She did very little to pursue that goal following her first unsuccessful attempt.
He found her other attempts allegedly made shortly before the accident were unsupported by any documentary evidence.
The notes and records of her family doctor often mentioned her employment situation and prospects prior to the accident, but they made no reference to her desire to engage in police or corrections work.
While she said her reason for leaving the pre-accident security job was to pursue her career goal, she also said she left it because it involved too much driving.

Ms. Loyst submits that the arbitrator erred in stating that evidence establishing the possibility of psychological deterioration from engaging in employment similar to her pre-accident employment would have been relevant in determining whether Ms. Loyst’s claim for rehabilitation was “reasonable and necessary.” However, this simply reflects the idea that what is reasonable and necessary depends on the individual facts of the case. I am not persuaded that the arbitrator erred in considering that something beyond the career goal would be required to award this benefit.

More significantly, the arbitrator found that the degree was not even required for Ms. Loyst’s new career goal, despite the report of Ms. Claudia Maurice, the occupational therapist who submitted the treatment plans for rehabilitation benefits. Ms. Loyst submits that the arbitrator erred in doing so, and that it is sufficient if the degree would be helpful. However, I find it difficult to see how the arbitrator could have awarded the benefit claimed in light of Ms. Maurice’s own testimony that Ms. Loyst was physically and academically capable of working as a probation officer in 2005 when Ms. Maurice prepared the treatment plans:

Q. And you were certainly satisfied that in terms of the physical requirements she would have been able to do that job?

A. For the probation?

Q. Yeah.

A. Yes.

Q. As of the time you saw her?

A. Yes.

Q. And she had, at least theoretically, the – the academic requirements necessary to successfully apply. True?

A. As listed on Career Cruising, yes.

Q. Okay.

A. In terms of – yeah, okay.⁵

Ms. Loyst submits that the arbitrator erred in looking at the obligations and demands on her time. She had become the temporary sole custodial parent of three children, all under the age of five, while continuing to work full time, and she showed no intent to stop full-time work or take part-time courses. Given this situation, I see no error in the arbitrator’s statement that “her rehabilitation had to be realistic in order to be reasonable.” Furthermore, I do not accept Ms. Loyst’s submission that she is entitled to an open-ended order funding the college degree into the unknown future.

The arbitrator therefore had evidence before him to conclude that the proposed rehabilitation benefit was not reasonable and necessary, and I see no error of law in the way he reached that conclusion.

The arbitrator’s March 6, 2008 decision is therefore confirmed and Ms. Loyst’s appeal is denied.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.