Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 166

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BETWEEN:

C. C.

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

Before: Arbitrator Suesan Alves

Heard: August 6, 2009, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Alexander Voudouris for Ms. C. Paul Kiddey for Economical Mutual Insurance Company

Issues:

Ms. C. was injured in a motor vehicle accident on December 5, 2005. Economical Mutual Insurance Company (“Economical”) paid Ms. C. income replacement benefits between December 12, 2005 and August 10, 2008 under the Schedule.¹ She applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended, in relation to her claims for post-104 week income replacement benefits, interest and expenses. Economical disputes her entitlement to the relief she claims, and seeks its arbitration expenses.

Ms. C. brought a motion pursuant to section 67 of the Dispute Resolution Practice Code (Fourth Edition, Updated October 2003) (the “Code”) for interim benefits to be paid to her pending the resolution of her dispute with Economical.

The issue on this motion is:

Is Ms. C. entitled to interim income replacement benefits from the date they were terminated until the final Order in this arbitration pursuant to section 279(4.1) of the Insurance Act?

Result:

Economical shall pay Ms. C. interim income replacement benefits commencing August 6, 2009 and ongoing until the final Order in this arbitration.

EVIDENCE AND ANALYSIS:

Positions of the parties

On this motion, Ms. C. seeks interim income replacement benefits at the rate of $400 per week from August 10, 2008 ongoing, pending any final order. She submits that she meets the prima facie test for entitlement to post-104 week income replacement benefits; that Economical failed to terminate income replacement benefits in accordance with the provisions of the Schedule; and that her financial situation is dire and urgent.

Economical disputes Ms. C.’s entitlement to an award of interim income replacement benefits. Economical submits that on a motion for interim benefits all of the evidence on entitlement should be examined, and differences in the opinions offered by the parties’ experts should be resolved only after they have been subjected to cross-examination at a hearing. Economical further submits that the Insurer has cured any breach of the Schedule and that Ms. C. failed to exercise her ordinary remedy of seeking an early hearing date and is now seeks an extraordinary remedy of an award of interim benefits.

For the reasons which follow, I conclude that the Applicant has met the prima facie test and has established need. I am persuaded that I should exercise my discretion to order payment of interim income replacement benefits from the date of the motion until the final Order in this arbitration.

Test for interim benefits

Section 279(4.1) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, gives adjudicators at the Financial Services Commission of Ontario the discretionary authority to make interim orders pending the final order in any matter. Arbitrators have disagreed as to the test which should be used to guide the exercise of that discretion. Few interim benefits awards have been made.

The Applicant submits that the appropriate test is that the Applicant should demonstrate a prima facie case, need and urgency or a breach of the Schedule. The Insurer submits that the prima facie test is one which any applicant could pass.

In Malabanan and Canadian General Insurance Company (OIC A96-000084, July 26, 1996), conf'd on appeal (OIC P96-00073, February 4, 1998), Arbitrator Manji agreed with existing arbitral jurisprudence that one threshold criterion for an interim order was that the applicant should put forward at least a prima facie case for entitlement. “That is, the Applicant must produce evidence, which if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement.”

Arbitrator Manji went on to state that she “would not go so far as to require an applicant to present a convincing case for entitlement on an application for an interim order for payment of benefits” because she believed “that in most cases, it would be difficult for an applicant to present a convincing case without presenting his or her whole case. Convincing is defined in The Concise Oxford Dictionary as ...leaving no margin of doubt, substantial... and convincing proof is defined in the Blacks Law Dictionary as such as is sufficient to establish the proposition in question, beyond hesitation, ambiguity, or reasonable doubt, in an unprejudiced mind. The summary nature of the procedure on an application for an interim order would make it difficult for an applicant to meet this standard.”

In Ioannidis and Canadian General Insurance Group (OIC A97-001551, December 15, 1997), Arbitrator Manji had the opportunity to reconsider the tests she proposed in Malabanan, in light of subsequent arbitral decisions which proposed more onerous tests, such as requiring an applicant to establish “a convincing case,” or to persuade the arbitrator that success at an arbitration was not only “reasonable but also very probable.” Arbitrator Manji remained of the view that the appropriate test was that expressed in Malabanan.

I agree with Arbitrator Manji’s reasons in Malabanan and Ioannidis, and will apply those criteria in this case. My findings with respect to the question of whether the Applicant has made out a prima facie case are for the purposes of this motion and are not binding on the hearing arbitrator.

Has the Applicant made out a prima facie case?

The post 104-week test

To succeed at the hearing, Ms. C. must establish that “as a result of the accident, she is suffering a complete inability to engage in any employment for which she is reasonably suited by education, training or experience.”²

Ms. C. is presently 41 years of age. According to the evidence before me, she has worked as a registered practical nurse for approximately twenty-one years. I find that she is reasonably suited to perform that work by virtue of her education, training and experience.

Pre-accident condition and function

Before the 2005 motor vehicle accident which gives rise to this arbitration, Ms. C. was injured in motor vehicle accidents in 1998 and 2000. In 2003, she had a work-related low back sprain which caused her to be away from work for approximately a week.

Following the 1998 motor vehicle accident Ms. C. was treated for neck, left shoulder and arm pain. In June 2000, she had a minor motor vehicle accident which aggravated her existing problems and caused her to miss work for approximately one week. In 2003, she was diagnosed with probable fibromyalgia by a medical and rehabilitation DAC. A rheumatologist made the diagnosis of fibromyalgia in 2004.

Despite the fibromyalgia diagnosis, Ms. C. continued to work as a registered practical nurse. At the time of the 2005 accident she was working full-time as a registered practical nurse with one employer between 40 and 44 hours a week. She also worked with another employer. She did, however, take a month off work.

Her assignments as a registered practical nurse involved lifting, bending, stretching, stooping, walking, standing, reaching, sitting and driving. She visited patients in facilities and in their homes to provide needed care for individuals aged 16 years or older, and had a mixed group of patients: some were elderly, some disabled. She cared for and treated wounds; provided catheter care; took vital signs; administered needles to diabetics; performed foot care including nail cutting; lifted patients and moved parts of their bodies; transferred individuals from beds to chairs; rolled them over in bed; maintained and prepared notes and reports, used the telephone; and drove to see her patients. Her patient visits ranged between 10 minutes and an hour. Ms. C. described her work as demanding, but rewarding.

Post-accident condition and function

(a) The Applicant’s evidence

Ms. C. testified that before the 2005 motor vehicle accident she had upper body pain. However, as a result of the 2005 accident, she now has lower back pain as well. She is unable to tolerate prolonged sitting as this increases her low back pain. She suffers substantially from pain in her neck, upper and lower back and generalized pain throughout her entire body, including pain in her arms, knees and hands. She also suffers from headaches and from numbness in her feet.

She completed a chronic pain program at a hospital with full attendance. She was diagnosed with a chronic pain disorder associated with psychological and medical factors. She tries to do what she can. She does little house work. Her mother provides her with care. She testified that as things stand today she cannot work. She deposed that she has not been able to work in any capacity whatsoever since two days after the December 2005 accident. She believes that she has actually regressed over the last couple of years. In addition, she developed a driving phobia following the accident, for which she is now getting psychological assistance. Her father drove her into Toronto for the hearing.

The Applicant filed an Affidavit in support of her motion for interim benefits. She testified briefly at the hearing and was cross-examined. The Applicant was a candid witness and I found her to be credible. I accept her evidence

(b) The Applicant’s Medical evidence

The Applicant filed a medical brief. For purposes of this motion I have focused on the two medico-legal reports authored by Dr. P. Kirwin, physiatrist. I find that if Dr. Kirwin’s opinion evidence were accepted and believed, a conclusion in favour of Ms. C.’s entitlement to post 104-week income replacement benefits would be reasonable.

In Dr. Kirwin’s opinion, Ms. C.’s pre-accident medical status rendered her more vulnerable to suffering greater symptomatology, in the event she were to become involved in a traumatic event.

Ms. C.’s chief complaints were neck pain radiating into both hands more severe on the left side. She is left handed. She complained of headaches; low back pain; intermittent total body pain from head to toe which was increasing in severity.

On examination Dr. Kirwin found evidence of muscle spasm over various areas of her spinal paraspinal muscles, positive fibromyalgia tender points and limitation of cervical flexion and extension. On both formal and informal examination, there was a consistent problem for Ms. C. to sit for even a short period of time. In his opinion, Ms. C. continues to be unable to work in any capacity on a regular full-time basis.

Dr. Kirwin’s diagnoses include chronic pain syndrome; mechanical cervical, thoracic and lumbar pain; non-specific right and left foot arthralgias; fibromyalgia; bilateral patellofemoral syndrome; post-traumatic migraine and cervicogenic headaches; bilateral rotator cuff tendinosis; non-specific numbness of the hands and feet; non-specific hand weakness; diffuse non-specific twitching of the right leg; left anterior talofibular ligament strain and non-specific foot pain and wrist pain.

In Dr. Kirwin’s opinion, the investigations provided a basis for aspects of Ms. C.’s pain complaints. In his opinion, a component of Ms. C.’s cervical and arm complaints is due to disc osteophyte protrusion over her lower cervical spine and degenerative cervical spondylarthritis shown on MRI; a component of her lumbar pain and leg complaints is due a small L5/S1 disc protrusion.

Ms. C. has been prescribed a number of medications including painkillers, anti-inflammatories and anti-depressants but does not appear to tolerate them well. She has tried Cymbalta and Lyrica for her fibromyalgia and could not tolerate them as they made her feel light headed and jittery. She takes Percocet for pain; she divides the pills and spaces them through the day to minimize the amount of nausea and vomiting she experiences. This helps her tolerate her pain better including her fibromyalgia pain. She supplements this with Aleve and a topical analgesic cream. She has attended physical therapy, massage therapy, aqua fitness, and performs stretching and strengthening exercises to help her control her pain.

In Dr. Kirwin’s opinion, Ms, C. continues to be unable to work in any capacity on a regular and full time basis. In his opinion, retraining may be required if her pain becomes tolerable enough for her to tolerate such a program.

In terms of causation, Dr. Kirwin opined that prior to the December 2005 accident she was able to work at multiple jobs and commuted lengthy distances demonstrating a relatively high functional level. Since her accident her condition clearly degenerated and she has not been able to return to work.

Conclusion

I conclude that the Applicant has adduced evidence by way of an Affidavit, her testimony and various reports as to her pre-accident and post- accident function, and of her impairments which result from this accident. She has also adduced expert opinion evidence which supports that her condition degenerated as a result of the December 2005 accident and that she would meet the post 104 week disability test. Dr. Kirwin’s opinion is a considered one which takes into account her pre-and post accident history and function, his examination and investigations. There is objective evidence to support Ms. C.’s complaints of pain and inability to work.

For these reasons I find that the Applicant has established a prima facie case of entitlement to post-104 week income replacement benefits. I find that if the evidence she adduced is accepted and believed it is reasonable that she will succeed at the arbitration hearing.

Has the Applicant established need or urgency?

I find that the Applicant has demonstrated need based on the evidence before me.

Ms. C. lives with her spouse and three children. According to her Affidavit, their monthly expenses for mortgage, food, telephone, hydro, utilities, credit card payments and child support are approximately $2,825. These expenses do not include any amounts for clothing, school supplies, medication, etc.

In the pre-accident period when Ms. C. and her spouse were both working, their net funds on a monthly basis including a child tax credit were in the vicinity of $4,000. Ms. C. testified that during this period she was able to pay her bills. Since the accident she has had ongoing difficulties. As she described, it she has been “robbing Peter to pay Paul.”

There was a post-accident period in 2006 when she was not receiving income replacement benefits for about 14 months. During this time her spouse was also laid off. During that period she placed a second mortgage of about $30,000 on the home which was used to pay off credit card and other debts. She believes that in the present economic climate, the two mortgages exceed the equity in the home, so that this is not an available source of funds.

At the present time, Ms. C. has not received income replacement benefits for more than a year, since August 2008. In about August 2009, her spouse was again laid off. She deposed that their credit cards are again maxed out. Her father has loaned them money. The money coming into the household is $1,900 per month, which consists of a child tax credit of $1,050 and $850 per month from Ontario Works. Ms. C. testified that while her spouse had applied for employment insurance benefits, even if he obtains those benefits, Ontario Works would claw back any amounts he received dollar for dollar. I accept that these funds are not sufficient to meet their ongoing expenses.

I accept that Ms. C. has demonstrated financial need. I am persuaded that I should exercise my discretion to grant interim benefits from the date of the motion until the final order in this arbitration.

A breach of the Schedule?

The Applicant alleges that the Insurer breached the provisions of the Schedule as it did not use one of the methods of delivery prescribed by the Schedule when it gave Ms. C. a copy of the report of the insurer’s examination on which it terminated her income replacement benefits. The Insurer disputes that there was a breach, and submits that if there was one, it was a minor breach which had since been cured.

Arbitrators have held that a blatant disregard by the insurer of the Schedule or of the Insurance Act is sufficient in whole or in part to ground an order for interim benefits.³ These cases involve serious non-compliance with mandatory provisions of the legislation which were designed to protect against a premature or arbitrary termination of benefits. However, where breaches are trivial or have been cured, arbitrators have held that they are insufficient to ground an award of interim benefits.⁴

As the Applicant has succeeded on this motion, I do not need to deal with the question of whether a breach occurred and if so whether it was sufficient to ground an award of interim benefits.

Timing of the hearing

The Insurer submitted that the Applicant’s claim for interim benefits should be denied as she could have had an earlier arbitration hearing date. Counsel for the Applicant was a sole practitioner at the time of the pre-hearing. His efforts and those of Ms. C. to move her case forward expeditiously are detailed in her Affidavit.

Economical wrote Ms. C. on June 12, 2008 that her income replacement benefits would be terminated effective August 10, 2008. Her counsel applied for mediation on her behalf on July 3, 2008. When the Commission did not promptly assign a mediator as prescribed by the Insurance Act, the offices of counsel for the Applicant followed up concerning that delay. By working backwards from the end of the 60 day period, I infer that the Commission assigned a mediator in October 2008. The mediation failed on December 16, 2008. Her application for arbitration was delivered with a letter dated January 16, 2009. The pre-hearing was held in April 2009.

Practice Note 7 of the Code contemplates a hearing date within four to six months of the pre-hearing; however, the pre-hearing arbitrator may permit later dates on consent and for good reason. In this case, the Applicant’s counsel proposed dates which were approximately five and six months after the pre-hearing; the Insurer’s counsel proposed dates that were approximately three, six and seven months after the pre-hearing. Neither counsel was available on the dates the other proposed and hearing dates were scheduled in December 2009 and January 2010 on consent. I am not persuaded that these circumstances would justify a denial of the Applicant’s request for interim benefits.

Expenses:

I leave the question of expenses of this motion to the hearing arbitrator.

December 2, 2009

Suesan Alves Arbitrator

Date